Bank of Ireland raises income guidance to 2027 on strong loan growth
Ireland's biggest lender also said its estimates in February for deposit and loan book growth of 3% and 4% respectively in both 2026 and 2027 were unaffected by the macroeconomic uncertainty associated with U.S. tariffs. On Sunday, a deal between the U.S. and the EU, which includes Ireland, imposed a 15% tariff on most European Union goods.
First half pre-tax profits fell to 721 million euros ($832.32 million) from 1.1 billion euros in 2024 following a run of European Central Bank rate cuts. Bank of Ireland shares were 1.7% lower in early trading.
The bank's Irish loans and deposits grew by 5% year-on-year in the first half, the former driven by mortgage lending where Bank of Ireland has a market leading 40% share.
That prompted the upgrade of net interest income for 2025 to 3.3 billion euros 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% 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 17 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.
($1 = 0.8663 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
31 minutes ago
- The Independent
Domino's profits fall as people order fewer takeaways
Domino 's Pizza Group has warned it will miss its annual profit targets after opening fewer new stores than anticipated, citing cautious franchisees and a downturn in consumer confidence. The pizza delivery business saw its shares plunge in early trading following the announcement. The fast-food giant attributed the slowdown in expansion to its franchisees adopting a "cautious" approach, primarily driven by increased labour costs stemming from the government 's recent budget. This, coupled with what the company described as "weaker" sentiment among its customer base, has led to the revised profit outlook. Domino 's joins a growing list of high street hospitality businesses, including Greggs, that have recently flagged "tougher" market conditions and mounting pressure on customer demand. The pizza chain, which operates 1,381 outlets across the UK and Ireland, confirmed on Tuesday that its sales growth has been directly impacted by "weak" consumer confidence over recent months. Andrew Rennie, chief executive of Domino's, said: 'There's no getting away from the fact that the market has become tougher both for us and our franchisees, and that's meant that the positive performance across the first four months didn't continue into May and June. 'Given weaker consumer confidence, increased employment costs and uncertainty ahead of the autumn statement, franchisees are taking a more cautious approach to store openings for the time being.' It said this has caused a 'short-term slowdown' in new stores but stressed that it expects this to pick up again next year. Domino's has opened 11 new stores so far this year and expects overall openings in the 'mid-20s' this financial year. The company had previously said it expected to open 'in excess of 50 new stores' this year. It came as the group also warned that profits would miss previous guidance due to weaker trading. Domino's told shareholders that it expects to deliver earnings between £130 million and £140 million for the year. It had previously said it was due to meet market expectations of between £140.8 million and £149.7 million. It came as the business revealed that system sales grew 1.3 per cent to £777.8 million for the 26 weeks to June 29. Like-for-like sales were 0.1 per cent lower for the half-year, as a positive first quarter was offset by a 0.7 per cent decline in the second quarter, when delivery orders 'weakened'. The group added that 'softer' trading improved towards the end of July. Mr Rennie stressed that 'weakness' in consumer sentiment has weighed on the whole sector, highlighting that the firm has continued to grow market share despite recent pressure. He also highlighted that franchisees are keen for certainty over the Government's next budget as they assess investment plans for the year ahead. He told the PA news agency: 'Our franchisees are mainly concerned about uncertainty ahead of the upcoming budget. 'We want to see stability so that we, and our franchisees, can be confident in our investment plans. 'We don't want to see an increase in the quantum of costs on small businesses because you have to make these sustainable to support any growth agenda.'
Reuters
31 minutes ago
- Reuters
Trump's attacks on Fed, data integrity weigh on US dollar forecasts: Reuters poll
BENGALURU, Aug 5 (Reuters) - The U.S. dollar will weaken steadily over the coming months on mounting concerns over the Federal Reserve's independence, the credibility of official statistics, ballooning fiscal debt and rising bets on interest rate cuts, a Reuters survey of foreign exchange analysts showed on Tuesday. Underscoring those concerns, President Donald Trump's dismissal of the Bureau of Labor Statistics commissioner last week over unproven claims of data rigging - following record downward revisions to job numbers - prompted a swift reversal of recent dollar (.DXY), opens new tab gains from Trump's tariff deal with the EU. While there was a modest pullback from a crowded short-dollar trade, the greenback is still down nearly 9% this year against a basket of major currencies. Trump's erratic tariff moves, repeated attacks on the U.S. central bank and Fed Chair Jerome Powell and rising debt levels have made investors rethink holding U.S. assets and raised the term premium - compensation demanded for holding long-term debt. Reflecting that sentiment, foreign exchange strategists, who have maintained a bearish dollar outlook since at least April, forecast in an August 1-5 Reuters poll that the euro would gain around 2% to $1.17 by the end of October and continue to rise to $1.18 in six months. The euro would then rise to $1.20 in a year - the highest survey median since October 2021. "We've been trading in this environment of U.S. exceptionalism and the U.S. being far and away the strongest economy in the world. That just isn't the case anymore in my view," said Erik Nelson, head of G10 FX strategy at Wells Fargo. "There are underlying structural concerns - Fed independence, data quality, you name it. When it comes to the economic backdrop, all that is heading in the wrong direction. The temptation for the foreseeable future will be to sell the dollar on rallies." An overwhelming majority, 89 of 100 top policy experts in a separate Reuters survey, raised concerns over the accuracy of U.S. government statistics days before Trump fired BLS Commissioner Erika McEntarfer. Investor nerves have been further frayed by Trump's repeated attacks on Powell, who has so far resisted the president's demands for steep rate cuts - and Fed Governor Adriana Kugler's early resignation, potentially shaking up an already-fractious succession process for the Fed's leadership. Powell's term as Fed chief expires next May. "For Trump to place one of his nominees as governor, who could then be elected Chair next year - I believe markets would take it quite poorly. Naturally, there will be a lot of scrutiny on how many members switch to the dovish side or whether they remain more cautious and fail to align with a new dovish Chair," said Francesco Pesole, FX strategist at ING. "Should markets interpret Fed independence as having been materially compromised, that would be quite a compelling argument for a weaker dollar." Interest rate futures are currently betting on roughly three Fed rate cuts by the end of this year, with the first move happening in September - a sharp increase from just the one or two reductions in borrowing costs anticipated weeks earlier. The European Central Bank is priced for just one cut or no cuts. While a still-resilient U.S. economy and the risk of tariff-driven inflation have pared some of the dollar's gains - net-short dollar positions had reached a two-year high in late June - the greenback's slide may only slow but not reverse. Over 60% of strategists, 26 of 42, expected dollar net-shorts in Commodity Futures Trading Commission positioning to either rise or hold steady by the end of October, the survey showed. But a growing minority, over a third of respondents versus 17% in July, now predict a decrease in net-short bets. "Short-dollar has been one of the most consensus trades this year, and most investors still expect long-term depreciation to continue. But near-term views have become less bearish, and therefore positioning is more likely to move towards fewer net shorts over the next few months," said Jason Draho, head of asset allocation in the Americas at UBS Global Wealth Management. (Other stories from the August foreign exchange poll)
BreakingNews.ie
31 minutes ago
- BreakingNews.ie
Central Bank should carry out ‘immediate' review of Israeli war bonds
The Central Bank should carry out an 'immediate' internal review before it renews a request from Israel to continue to facilitate the sale of its war bonds, an Oireachtas committee has said. The Joint Committee on Finance made the recommendation in its report on the Israeli Bonds Programme, published on Tuesday. Advertisement The cross-party committee stated that the Central Bank of Ireland should review the process for the approval of the prospectus for the sale of Israeli bonds within the European Union. Under the EU Prospectus Regulation, a prospectus must be drawn up, approved and published when securities are to be offered to the public or admitted to trading on a regulated market in the EU. The Joint Committee on Finance, Public Expenditure, Public Service Reform & Digitalisation & Taoiseach chaired by Deputy @Farrell_Mairead has published its Israeli Bonds Programme Report. #SeeForYourself Press release: Report: — Houses of the Oireachtas - Tithe an Oireachtais (@OireachtasNews) August 5, 2025 Third Country issuers must choose an EU country as their Home Member State, and follow certain criteria set out in the prospectus regulation. Prior to 2021, the UK was the EU Home Member State for Israel. Ireland was then chosen as the new state after the UK's left the EU. Advertisement The bank is the designated authority in relation to the sale of Israel bonds in the EU, and has determined the securities meet the standards of the bloc's prospectus regulations. The committee's chairwoman, Sinn Féin's Mairead Farrell, said the Central Bank's facilitation of Israeli bonds arose as 'a matter of concern'. 'In line with these engagements, the committee understands that the Central Bank may only refuse the approval of a prospectus where the Central Bank has legal basis to do so,' she said. 'Early in its establishment in this Dáil, the Joint Committee took the decision to carry out an in-depth consideration of the holding of the prospectus for Israeli Bonds by the Central Bank of Ireland, with the aim of determining if there are any avenues available to the Central Bank to refuse to facilitate the prospectus. Advertisement 'The Joint Committee held two public sessions on this topic in June, meeting with officials from the Central Bank of Ireland; representatives of the Ireland-Palestine Solidarity Campaign; and expert in international law, Dr Munir Nuseibah of Al Quds University in Jerusalem. 'Ireland has been to the forefront and steadfast in its position of support and solidarity with the people of Palestine, but we must ask ourselves are we doing everything we can. 'The issuing of bonds by the State of Israel is seen to assist in the financing of Israel's continued violations of human rights. 'As such, the facilitation of the prospectus by the Central Bank raises issues of significant concern for the Joint Committee, not only around moral obligations but also obligations under international law. Advertisement 'This report details the various obligations flowing from EU law, international law, and how those obligations interact.' The Joint Committee makes 15 recommendations in its report. 'These include that the Government engage at EU level with a view to amending the EU Prospectus regulations to permit each individual European Central Bank to refuse to act as a Competent Authority; The Central Bank engage with other EU Central Banks to develop a mechanism whereby an individual Central Bank can refuse to process any new prospectus certification request; Advertisement The Central Bank as the competent authority shall conduct an immediate internal review in advance of any renewal in September of the Israeli bond prospectus with the intention of determining whether it is in compliance with the Prospectus Regulation in terms of the required level of disclosure, accuracy and transparency; Pending the outcome of a compliance review of the Israeli Bond Prospectus under Article 32.1D of the Regulation, the Central Bank of Ireland exercises the powers vested in it, by refusing to certify the renewal of the prospectus or any new applications for the certification of a related prospectus, until such a time when it is satisfied that it is in compliance with the rules as set out in the Regulation. The Central Bank seeks legal advice and makes information available which clarifies that their decision in approving a prospectus is not in breach of international law. The Government consider what national restrictive measures are possible in relation to the approval of prospectuses by the Central Bank of Ireland, which could be used to ensure compliance with the International Court of Justice (ICJ) opinion of July 2024. Ms Farrell said the committee believes the review should seek supplementary information from Israel. 'It should include an examination of the completeness of the bond prospectus and a request that further information be provided by the Israeli authorities. 'This should take into account the nature of the case taken by South Africa against Israel under the Genocide Convention and the interim findings of the ICJ in that regard, the ICJ advisory opinion of July 2024 in respect of the illegal situation created by Israel in the Occupied Palestinian Territories, and any other pertinent matters in respect of international law. Ireland Gena Heraty kidnapping: Simon Harris holds talks w... Read More 'The Joint Committee is of the view that an amendment to the Prospectus Regulation to allow individual European Central Banks to refuse to act as competent authority is necessary in order to allow individual member states to make decisions which align with their stated position, and indeed, with obligations under international law. 'The Committee further believes that the Central Bank is vested with powers that it has not yet exercised and makes a number of recommendations identifying areas which may provide the Central Bank with the opportunity to desist from facilitation of the prospectus. 'The Joint Committee encourages the Central Bank to exercise the powers available to it in this regard.'
