The Bank of Ireland announced this Wednesday that it will be issuing its first interim dividend since the financial crisis; this news comes even as interest rates are dropping quicker than previously foreseen. Shareholders are set to receive a dividend distribution of 35 cents next week. Even though this year’s net interest income has taken a dip, falling from €3.68 billion last year to a projected total of €3.55 billion, the bank reaffirms that this change aligns with market predictions.
The lender reported that, despite experiencing a 3% drop in net interest income over the first nine months of the year, this percentage decrease is expected by the market. With the European Central Bank already having decreased its key rates three times since June, and it being widely predicted to further cut by a quarter-point in December, the trend aligns with the financial forecast.
Following the trend of increases, Bank of Ireland’s loan portfolio grew an impressive 4% year on year, culminating in a total of €82.5 billion at the end of September. In keeping with this, the bank’s retail net lending in Ireland also rose by €1.4 billion, buoyed by continued growth in the mortgage lending sector. For the first three-quarters of this year, its new home loan market share stood at 41%.
The bank further stated that its wealth management assets rose by 4% during Q3, reaching €52.8 million. A significant factor in this was a €700 million influx of new investor money, primarily directed towards its Davy unit.
In reference to the ongoing investigation by the UK Financial Conduct Authority (FCA) into the motor finance industry where the bank holds a 2% market share, Bank of Ireland expressed that it acknowledges the recent UK Court of Appeal ruling regarding historical motor finance lending. This follows the court’s decision last week, which may lead to numerous claims, worth billions of pounds, for mis-sold motor finance after the court determined some dealers failed in their fiduciary duty to customers. As a direct result, the lenders have been instructed to reimburse collected commission to borrowers.