- Loan and Deposit Growth Loan/deposit book expanded 6% in 2025, with 4% annual net lending growth expected over the cycle.
- Capital Generation Generated 270 bps of capital in 2025 (totaling 920 bps/EUR 5B over cycle), targeting EUR 3.7B net capital generation by 2028.
- Cost Efficiency Cost-income ratio to fall from 52% (2025) to mid-40s by 2028, EUR 250M in savings via AI (20% contribution) and process optimization.
- Net Interest Income (NII) NII to rise from EUR 3.4B (2025) to >EUR 3.85B by 2028, driven by balance sheet growth and structural hedges.
- Strategic Return on Equity Target ROCE >16% by 2028 (+500 bps since 2025), with total income exceeding EUR 4.75B and CET1 guidance at 14.5%.
Growth Prospects
The bank's growth prospects are underpinned by Ireland's strong economic outlook, with average annual GDP growth forecast to be 3% out to 2028, and a population expected to increase by 17% by 2040. Bank of Ireland is well-positioned to capitalize on this growth, with a strong presence in Mortgages, Everyday Banking, Corporate & Commercial Lending, and Wealth and Insurance. The bank expects to see net lending growth of around 4% per year, deposit growth of 3%, and AUM growth of 10% over the next cycle, as noted by Myles O'Grady, "With Ireland's average annual GDP growth forecast to be 3% out to 2028 and a population expected to increase by 17% by 2040, we see a highly attractive market driving balance sheet growth."
Valuation and Dividend Yield
Bank of Ireland's valuation metrics appear reasonable, with a Price-to-Tangible Book Value (P/TBV) ratio of 1.34, and a Dividend Yield of 3.37%. The bank's Net Interest Margin (NIM) is expected to remain strong, driven by its structural hedge and balance sheet growth. The bank's guidance implies a strong capital generation capacity, with a CET1 ratio of 14.5% expected, and a progressive ordinary dividend per share supported by a payout ratio of around 50%.
Strategic Priorities
The bank's strategic priorities include continued business model momentum in Ireland, allocating capital to optimize returns, and investing for the future. Bank of Ireland is committed to harnessing the benefits of AI, while managing the associated risks. The bank's wealth business is expected to be a key driver of growth, with a focus on the affluent market and investments in digital and CRM capabilities. As Myles O'Grady noted, "Our wealth business accounted for just under 50% of our total fee income, and that's going to grow more."