In an interim administration statement on Thursday, the bank said it expects its bank levy contribution to more than triple as a result of changes in the 2024 Budget.
Bank of Ireland currently expects net interest income earnings to be close to €1.9 billion, or around 5% above its first half level of €1.802 billion.
Growth in the nine months to September was due to “business momentum”, driven by higher interest rates, acquisitions, credit growth and “strong commercial pricing discipline”.
Trading revenue rose 11 per cent in the year to September compared to the same period in 2022, driven by higher fees from client activity and the acquisition of stockbroker Davy.
In line with the guidance, operating expenses are expected to be around 1.85 billion euros in 2023.
Reported costs were 10 percent higher in September compared to the same period in 2022, mainly due to acquisitions, investments and the removal of wage restrictions during the bailout period.
Ireland’s net loans after the acquisitions were €1.3 billion, thanks to strong mortgage lending; green mortgages account for 51 per cent of new mortgages in Ireland.
The overall loan book has increased by €8.7 billion since December last year; This includes loans of 8 billion euros from the existing bank KBC.
While lending performance in Ireland has been strong, there has been a €0.5bn reduction in Bank of Ireland’s UK Retail arm, in line with strategy, and a “cautious” €0.7bn reduction in international corporate and real estate lending.
Customer deposits increased by €1.3 billion to €100.5 billion as of the end of September compared to the same period last year; This was a reflection of the new KBC customers.
Bank of Ireland Group chief executive Myles O’Grady said performance was “strong”.
“This performance supports our aim to deliver more to our customers, colleagues, shareholders and society.
“While asset quality remains solid, we recognize our clients’ challenges arising from the high interest rate environment and continue to support them with a balanced approach to pricing.
“Our business actions and strategic execution deliver consistently strong organic capital generation and give us confidence in the group’s outlook for the remainder of 2023 and beyond.”
The bank reported strong capital levels, with a fully-loaded common equity Tier 1 ratio of 15.2 percent, which has increased since the end of June.
Non-performing risks remained at 3.6 percent.
Following changes to the budget, Bank of Ireland provisionally forecasts the 2024 Irish bank levy to be €90 million, compared to €25 million in 2023.
As of the end of September, the Group’s liquid assets were EUR 42.2 billion and its wholesale funding was EUR 11 billion.
At the end of September, the Liquidity Coverage Ratio was 186 percent, while the Net Stable Funding Ratio decreased slightly to 153 percent. Both were down from last year, reflecting the impact of the acquisition of KBC portfolios.
