Bank of Ireland raises 2026 income and capital guidance after strong growth

Bank of Ireland has again upgraded key financial targets for this year after positive growth in lending, deposits, and wealth assets.

In an interim management statement covering the nine months to the end of September, the lender said that total consumer loans rose by €3.6 billion to €86.1 billion.

Irish loans rose around 8 per cent, led by mortgages and lending to small businesses, while deposits were up 3 per cent to €110.3 billion and operating costs increased 2 per cent.

The statement added that around 5 per cent loan book growth is expected in 2026, and the bank reaffirmed its key guidance issued earlier in the year. Statutory return on tangible equity is expected to be more than 14 per cent this year, and on track to rise above 16 per cent by 2028, the bank said.

In July, Bank of Ireland upgraded most of its financial targets for this year, with net interest income (NII) forecast at around €3.5 billion.

Bank of Ireland chief executive Myles O’Grady said the further “positive commercial performance” has led the bank to upgrade its NII guidance for the second time this year to greater than €3.5 billion.

The bank’s interim management statement said NII has been 4 per cent higher year to date compared to the same period in 2025 due to balance sheet growth and structural hedge benefits.

It added that total fee income rose by 6 per cent compared to the same period last year, with circa 4 per cent expected across the full year, while assets under management grew to €67 billion, up €1.5 billion in the third quarter.

“Three quarters into the first year of our new strategic cycle, we are delivering against all priorities and targets with real momentum. This is reflected in continued growth in loans, deposits and wealth assets under management, supporting income growth and strong capital generation, whilst asset quality remains resilient,” O’Grady said.

He added the company would remain alert to geopolitical developments, but noted a favourable Irish economy and its position in the market has made him confident Bank of Ireland is on track to deliver financial targets out to 2028, including the growth of return on tangible equity to more than 16 per cent.

The bank’s statement said that based on positive indicators in the Irish economy, it recently raised its modified domestic demand growth forecasts for 2026 from 2.7 per cent to 3.9 per cent, while the forecast for next year has risen from 2.4 per cent to 2.8 per cent.

Consumer inflation is expected to average 3.5 per cent and 3.2 per cent in 2026 and 2027, respectively, while employment growth of 1 per cent is expected this year and 2 per cent next year.

House price inflation, forecast to be 4 per cent this year, is expected to ease to 3.5 per cent next year, with the bank predicting housing completions of 39,600 and 42,000, respectively in each year.