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(Alliance News) - Bank of Ireland Group PLC on Tuesday reported a lower profit for 2022 due to the inclusion of acquired wealth manager J&E Davy, but tripled its shareholder distribution.
The Dublin-based lender announced a pretax profit of EUR1.06 billion, down 14% from EUR1.22 billion a year prior. Net interest income grew 12% to EUR2.48 billion from EUR2.21 billion.
"The Irish economy performed resiliently during 2022, despite the ongoing cost of living crisis and external headwinds. The latest European Commission data show that Ireland was the European Union's fastest growing economy for a third successive year," the bank said.
Operating expenses increased 6.0% to EUR1.75 billion from EUR1.65 billion.
"While reported costs were 6% higher in 2022, this reflects the inclusion of Davy from 1 June and one-off investment relating to the on-boarding of new customers in an operationally safe manner during the year," Bank of Ireland explained, referring to its completed EUR427 million acquisition of Dublin-based stockbroker and wealth manager J&E Davy in June 2022.
The company incurred a net impairment loss of EUR187 million in 2021, compared to a net gain of EUR194 million on financial instruments in 2021.
Bank of Ireland proposed a EUR350 million shareholder distribution, up sharply from EUR104 million for 2021. The distribution for 2022 will be EUR225 million in dividends, equivalent to 21 euro cents per share, and a EUR125 million buyback. The dividend will have a 25% pay-out ratio with a target to build this to 40% by 2024.
The bank's regulatory common equity tier 1 ratio decreased to 15.9% at December 31 from 17.0% a year prior. The CET1 ratio compares a bank's capital against its risk assets, with a higher ratio being more financially sound.
Looking ahead, Bank of Ireland targets a return on equity of around 15%, compared to 8.3% in 2022. Further, it expects like-for-like costs to be broadly in line with 2022.
Bank of Ireland shares were 3.3% higher at EUR10.80 each on Tuesday in London.
By Tom Budszus, Alliance News reporter
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