Bank of Ireland Group (BIRG) Q2 2024 earnings summary

Executive summary

• Profit before tax for H1 2024 rose 5% year-on-year to €1.1bn, with ROTE at 18.9% and strong capital generation.

• Interim dividend of €352m (35c per share) announced, with a payout ratio of 40% and ongoing share buybacks.

• Maintained robust capital position with CET1 ratio at 15.4% and organic capital generation of 170bps in H1.

• Strategic focus on Irish loan growth, new customer acquisition, and expanding wealth and insurance assets.

• Business model remains highly capital generative, supporting investment and shareholder returns.

Financial highlights

• Net interest income stable at €1.8bn; total business income up 6% year-on-year, driven by wealth and insurance.

• Operating expenses increased by 6% to €961m, reflecting inflation and investment for future efficiencies.

• NPE ratio reduced to 2.9%, below the 3% milestone, reflecting improved asset quality.

• Impairment charge for H1 was €50m (12bps), with full-year charge expected at 20bps, a significant upgrade.

• Tangible net asset value per share increased to €9.96.

Outlook and guidance

• Upgraded full-year capital generation guidance to 310-320bps; ROTE expected to exceed last year's 17.3%.

• Net interest income for 2024 guided at €3.55bn, with stability expected in 2025 despite lower rates.

• Fee income, especially from wealth and insurance, expected to grow mid-single digits into 2025.

• Operating expenses projected to grow 5-6% for the full year, consistent with prior guidance.

• Distribution policy targets CET1 above 14%, with progressive DPS and share buybacks.