Bank of Ireland to return £984m to shareholders after profits rise

The Bank of Ireland will more than triple shareholder returns after the country’s biggest lender saw a rise in full year profits.

The company plans to return €1.15billion (£984million) to shareholders, €634million of which will be in dividends, with the rest through share buybacks.

Bank of Ireland’s pre-tax profit rose 92 per cent to €1.9billion (£1.6billion) in 2023, on the back of central bank interest rate hikes.

But the outcome disappointed analyst forecasts of a €2.1billion pre-tax profit, according to LSEG data.

The company plans to return €1.15billion to shareholders, €634million of which will be in dividends, with the rest through share buybacks

The bank also said it expects its 2024 net interest income to be 5 per cent to 6 per cent lower than the fourth quarter annualised run rate as the European Central Bank (ECB) lowers rates this year.

Bank of Ireland shares were down 11.72 per cent to €8.03 in Monday morning trading.

The ECB’s key rate is forecast by Bank of Ireland to fall to 2.75 per cent by the end of the year from a record high of 4 per cent.

The bank’s net interest income jumped 48 per cent year on year to €3.7billion in 2023.

Ireland’s highly concentrated banking sector makes more of its profit through interest revenue than European peers.

Since the ECB increased its rates 18 months ago, lenders have seen a surge in net interest rates.

The bank said it also expects its strong capital position to continue in 2024, with distributions again comprising dividends and share buybacks.

Its net credit impairment charge doubled to €403million, which the bank said included adjustments to address potential risks, primarily in commercial real estate.