Bank of Ireland announced an increase in returns to shareholders despite a 4% drop in full-year pretax profit. The bank anticipates sustained growth in deposits and loans until 2027, supporting a rising dividend policy. Projections for 2026 and 2027 anticipate Irish economic growth of over 3% annually, with a 3% and 4% growth in deposit and loan books respectively. This growth is expected to generate net capital around 45% of the bank's 2024 market cap from 2025 to 2027, enabling a dividend payout ratio of 40-60% with potential share buybacks.
Bank of Ireland's finance chief, Mark Spain, emphasized the strength of the Irish economy, expressing confidence in weathering challenges such as potential impacts from U.S. corporate tax changes. Despite these challenges, the bank remains optimistic due to the resilience of its loan books and healthy customer base.
The bank's full-year pretax profits declined to 1.86 billion euros from 1.94 billion euros the previous year. Shareholders can expect 1.22 billion euros in returns through dividends and share buybacks, equivalent to 80% of its earnings, surpassing the 1.15 billion euros distributed last year. Bank of Ireland achieved a return on tangible equity of 16.8% and projects a 15% return this year, with expectations of surpassing 17% by 2027.
Additionally, Bank of Ireland allocated 172 million euros to potentially cover costs related to motor finance commissions, acknowledging possible future financial impacts.