Bank of Ireland’s customer loan volumes were €73.5bn at end September 2022, €2.8bn lower compared with December 2021, according to the bank’s interim management statement.
Net lending of €1.9bn was recorded in the Retail Ireland and Corporate & Markets units, but in the UK net loans have reduced by €3bn year to date.
New lending increased 13% year-on-year in the nine-month period. Retail Ireland increased by 30% with strong growth across mortgage, business banking and consumer portfolios, with growth of c.40% in Q3 22 vs Q3 21.
The bank said Corporate & Markets lending rose by 23%. Retail UK decreased 19%, primarily driven by a reduction in mortgages, “reflecting pricing discipline and our strategic focus on value over volume”, according to the bank.
The bank said net interest income in the period was ahead due to rising interest rates. The bank now expects 2022 net interest income to increase by c.6-7% vs 2021.
In Association with
Business income (including share of associates and JVs, and excluding Davy) was 14% higher in the period.
The bank said its operating expenses, excluding levies and regulatory charges, were 1% lower in the nine months to September 2022, excluding Davy and the costs of absorbing new accounts from former customers of Ulster Bank and KBC.
Reported costs were 5% higher in the period, while the cost of ‘FX/other impacts’ amounts to €1.5bn.
Wholesale funding of €22.4bn has increased by €1bn since the start pf the year while customer deposits were €96.7bn at end September, €3.9bn higher compared with December 2021.
The bank said Retail Ireland deposits have increased by €7.8bn while Retail UK deposits have shrunk by €4.2bn. The group’s loan to deposit ratio is 78% vs 82% December 2021.
Gavin Kelly, Bank of Ireland Group Interim CEO, commented: “We delivered a strong business performance in the third quarter. Underpinning this were strong capital and funding positions, focussed cost discipline, and growing income.
“We grew lending in our Retail Ireland and Corporate and Markets divisions and we continued to execute our strategy of value over volume in the UK. The KBC transaction is going through final approvals and expected to close by end Q1 2023.
“We also grew our customer base in Ireland, taking a wide range of actions to reach and support those moving bank and deliver on this once-in-a-generation commercial opportunity.
“In the first nine months of the year we’ve opened c.245,000 new current and deposit accounts, up c.90% compared to the same period in 2021.”
Kelly added that overall business momentum is “positive”.
