Bank of Ireland confirmed on Wednesday that it will pay its first interim dividend since before the financial crisis, as the lender stuck to its full-year income forecasts even as interest rate fall at a faster pace then previously expected.
The bank said that it will pay an interim dividend of 35 cent to shareholders next week. It reiterated that its net interest income is on track to amount to €3.55 billion, albeit down from €3.68 billion last year, when official interest rates peaked.
Net interest income was 3 per cent lower in the first nine months of the year, the bank said, adding that this was in line with market expectations. The European Central Bank (ECB) has reduced its main rates three times since June and is now widely expected to make a further quarter of a percentage point cut in December.
Bank of Ireland’s loan book increased by 4 per cent on the year to €82.5 billion at the end of September.
The bank’s retail Ireland net lending increased by €1.4 billion, supported by continued growth in mortgage lending. Its market share of new home loans was 41 per cent for the first nine months of the year.
The lender said that its wealth management assets grew by 4 per cent during the third quarter to €52.8 million, supported by an inflow of €700 million of fresh investors’ money during the period, mainly to its Davy unit.
As the UK Financial Conduct Authority (FCA) continues an investigation into the motor finance industry – where it has a 2 per cent market share – over unfair commissions, Bank of Ireland said that it “notes” a recent UK Court of Appeal ruling in respect of historic motor finance lending.
The Court of Appeal opened the door last week to billions of pounds worth of claims for mis-sold motor finance after finding some dealers in breach of their fiduciary duty to customers. As a result, the lenders have been ordered to repay the commission to the borrowers.
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