Bank of Ireland pre-tax profits fall by third in first half of year

Reuters

Bank of Ireland reported a 33 per cent drop in profit for the first half of the year as its net interest income declined.

First half pre-tax profits fell to €721 million from €1.1 billion in 2024 following a run of European Central Bank rate cuts. Bank of Ireland shares were 1.7 per cent lower in early trading.

However, the bank upgraded its full-year net interest income guidance to 2027 on Tuesday after reporting strong loan book growth in the first half.

The country's biggest lender also said its estimates in February for deposit and loan book growth of 3 per cent and 4 per cent respectively in both 2026 and 2027 were unaffected by the macroeconomic uncertainty associated with US tariffs.

On Sunday, a deal between the US and the European Union, which includes Ireland, imposed a 15 per cent tariff on most EU goods.

The bank's Irish loans and deposits grew by 5 per cent year-on-year in the first half, the former driven by mortgage lending where Bank of Ireland has a market leading 40 per cent share.

That prompted the upgrade of net interest income for 2025 to €3.3 billion from the prior guidance of above €3.25 billion, with the forecasts for 2026 and 2027 also nudged up to above €3.3 billion and greater than €3.5 billion respectively.

The upgraded net interest income forecasts point to upside to 2026 and 2027 management and consensus expectations, analysts at Davy Stockbrokers wrote in a note.

Analysts expect pre-tax profits to fall by 18 per cent for 2025 as a whole, based on an average of 12 polled by LSEG SmartEstimate.

Bank of Ireland finance chief Mark Spain told Reuters that the trade deal on Sunday would not alter the bank's July 17th upgrade to its forecasts for Irish economic growth and that the removal of uncertainty may offer some upside.

He added that its loan book showed there were no perceptible challenges emerging from the tariffs and that the caution larger business customers had shown at the height of trade tensions in April was beginning to dissipate.