Bank of Ireland raises income guidance to 2027 on strong loan growth

DUBLIN, July 29 (Reuters) - Bank of Ireland upgraded its full-year net interest income guidance to 2027 on Tuesday after reporting strong loan book growth in the first half when lower interest rates reduced its pre-tax profit by one-third.

Ireland's biggest lender also said its estimates in February for deposit and loan book growth of 3% and 4% respectively in both 2026 and 2027 were unaffected by the macroeconomic uncertainty associated with U.S. tariffs. On Sunday, a deal between the U.S. and the EU, which includes Ireland, imposed a 15% tariff on most European Union goods.

First half pre-tax profits fell to 721 million euros ($832.32 million) from 1.1 billion euros in 2024 following a run of European Central Bank rate cuts. Bank of Ireland shares were 1.7% lower in early trading.

The bank's Irish loans and deposits grew by 5% year-on-year in the first half, the former driven by mortgage lending where Bank of Ireland has a market leading 40% share.

That prompted the upgrade of net interest income for 2025 to 3.3 billion euros from the prior guidance of above 3.25 billion, with the forecasts for 2026 and 2027 also nudged up to above 3.3 billion and greater than 3.5 billion respectively.

The upgraded net interest income forecasts point to upside to 2026 and 2027 management and consensus expectations, analysts at Davy Stockbrokers wrote in a note.

Analysts expect pre-tax profits to fall by 18% for 2025 as a whole, based on an average of 12 polled by LSEG SmartEstimate.

Bank of Ireland finance chief Mark Spain told Reuters that the trade deal on Sunday would not alter the bank's July 17 upgrade to its forecasts for Irish economic growth and that the removal of uncertainty may offer some upside.

He added that its loan book showed there were no perceptible challenges emerging from the tariffs and that the caution larger business customers had shown at the height of trade tensions in April was beginning to dissipate.

Bank of Ireland