(Alliance News) - Bank of Ireland Group PLC on Monday reported a strong improvement in financial results in 2023, resulting in higher distributions to shareholders, but it warned that the year ahead likely will suffer from lower interest rates.
The Dublin-based lender reported pretax profit of EUR1.94 billion in 2023, up 92% from a restated EUR1.01 billion in 2022. Net interest income rose 49% to EUR3.71 billion from EUR2.49 billion amid rising interest rates last year, and total operating income was up 43% to EUR4.46 billion from EUR3.11 billion.
Looking ahead, Bank of Ireland said net interest income in 2024 is expected to be 5% to 6% lower than the run-rate in the fourth quarter of 2023 of EUR3.65 billion, suggesting it will total between EUR3.43 billion and EUR3.47 billion.
Total business income, however, is expected to increase by a mid-single digit percentage, supported by the Wealth, Insurance and Retail Ireland divisions.
Bank of Ireland's fully loaded CET1 capital ratio was 14.3% at the end of December. This is expected to improve to above 15% in 2024.
Total shareholder distributions were EUR1.15 billion in 2023, up from EUR350 million in 2022. This consisted of EUR634 million in dividends - or 60 euro cents per share - plus EUR520 million in share buybacks. In 2024, the company said it again plans a mix of dividends and buybacks, and it also will start interim distributions.
"In 2023, the group performed well with strong financial results, tangible strategic progress and improved customer and employee outcomes," commented Chief Executive Officer Myles O'Grady. "This represents an excellent start to our three-year strategic cycle, underpinned by our differentiated business model, the attractive markets in which we operate, especially Ireland, where the loan book grew by 23% and Wealth assets by 18%."
Back in September 2022, the Irish government sold its remaining 14% in Bank of Ireland, returning the lender to full private ownership following its taxpayer bailout in 2009 amid the global financial crisis.
Bank of Ireland shares fell 4.6% to EUR7.92 each on Monday morning in Dublin.
By Tom Waite, Alliance News editor
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Bank Of Ireland (BIRG)