By Elena Vardon
Bank of Ireland Group has raised its net interest income guidance for 2023 after reporting a significant increase in pretax profit and income for the first half of the year.
Strong Financial Performance
During the six months ended June 30, the Irish lender posted a pretax profit of €1.025 billion ($1.13 billion), compared to a restated €351 million in the same period the previous year. This impressive growth can be attributed to positive business momentum, higher interest rates, and a focus on efficiencies.
Operating income also surged to €2.20 billion, up from a restated €1.37 billion a year ago. Additionally, net interest income rose to €1.80 billion from €1.07 billion in the prior year.
Positive Outlook for Second Half of 2023
Bank of Ireland now expects net interest income for the second half of 2023 to be slightly higher than the first half. This updated outlook follows the bank's previous guidance of net interest income being over 12% higher than the annualized level of around €3 billion in the fourth quarter.
Expense and Impairment Charges
The group is maintaining its operating expenses guidance of approximately €1.85 billion for the year. Meanwhile, Bank of Ireland reported a 12% year-on-year increase in costs.
For the first half of 2023, the bank recorded a net impairment charge of €158 million, which aligns with their expectations.
Strong Loan Book Performance and Balance-Sheet Strength
Bank of Ireland's loan book stood at €80.7 billion, reflecting an €8.7 billion increase compared to six months prior. Notably, new lending in Ireland saw a 20% year-on-year increase, amounting to €5.2 billion.
The bank's fully loaded common equity Tier 1 ratio, a crucial measure of balance-sheet strength, stood at 14.8%. This was supported by net organic capital generation of 180 basis points. Furthermore, Bank of Ireland reported an adjusted return on tangible equity of 18.5%.
