Bank of Ireland Group (BIRG) Q2 2024 earnings summary

Executive summary

• Profit before tax rose 5% year-over-year to €1.1bn for H1 2024, driven by loan book and wealth asset growth, higher income, and strong capital generation.

• Interim dividend of €352m (35c per share) announced, reflecting a progressive distribution policy and 40% payout ratio.

• Maintained robust capital position with a pro forma CET1 ratio of 15.4% and organic capital generation of 170bps in H1.

• Irish operations (75% of profits) saw strong performance, especially in mortgages and wealth management; UK business returned to loan growth.

• Strategic focus on building customer relationships, simplifying business, and advancing ESG initiatives, including 24% growth in sustainable lending.

Financial highlights

• Net interest income stable at €1.8bn; total business income up 6% year-over-year, driven by wealth and insurance.

• Operating expenses increased by 6% year-over-year to €961m, mainly due to inflation and investment.

• NPE ratio improved to 2.9% from 3.1% at December 2023, reflecting better asset quality.

• Earnings per share rose 9% to 80.8c; adjusted ROTE improved to 18.9%.

• Interim dividend of €0.35 per share (40% payout ratio), with CET1 ratio at 15.4% post-dividend.

Outlook and guidance

• Upgraded full-year capital generation guidance to 310-320bps (from 260-280bps); cost of risk c.20bps; operating expenses 5-6% higher than FY23.

• Full-year NII expected at €3.55bn, at top end of guidance; NII to remain broadly stable in 2025.

• ROTE for 2024 expected above last year’s 17.3%, with 2025 ROTE to outperform 15% target.

• Basel IV implementation in 2025 expected to reduce RWA by up to 5%, supporting capital return strategy.

• Progressive ordinary dividend policy maintained; surplus capital to be returned via buybacks, targeting CET1 >14%.