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1. Company Snapshot

1.a. Company Description

Bank of Ireland Group plc provides various banking and financial products and services.The company operates through Retail Ireland, Wealth and Insurance, Retail UK, and Corporate and Treasury segments.It provides current and savings accounts, and business deposits and accounts; personal, car, home improvement, graduate, and student loans, as well as overdrafts; and business and farming loans, BREXIT loans, invoice finance, hire purchase, and leasing services.


The company also offers international payments and credit cards; protection overview, mortgage protection, life cover, specified illness cover, income protection, protection for individuals, and protection for families; pensions and investments, foreign exchange, and treasury deposits and services; personal products; private banking services; and leveraged acquisition and property finance.In addition, it provides home, car, travel, and life insurance products.Bank of Ireland Group plc was founded in 1783 and is headquartered in Dublin, Ireland.

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1.b. Last Insights on BIRG

Bank of Ireland Group plc's recent performance was driven by several positive factors. The company reported a robust financial performance with record distributions, while navigating international trade uncertainties and cost pressures. Additionally, Bank of Ireland UK invested $5m in enhancing invoice finance services, providing enhanced security and enabling customers to access cashflow facilities through a single online portal. Furthermore, the company committed $124m to upgrade services, aiming to speed up payment processing for retail and SME customers. The bank also announced plans to reduce its workforce over the next three years, but expects to maintain a stable number of branches. These initiatives demonstrate the company's efforts to improve efficiency and enhance customer experience.

1.c. Company Highlights

2. Bank of Ireland's Strong 2025 Results and Ambitious Growth Plans

Bank of Ireland reported a robust financial performance in 2025, with total income growing in line with expectations, driven by a 6% increase in loan and deposit books, and a 9% rise in wealth assets under management. The bank's net interest income (NII) is expected to grow from 2025 levels to around EUR 3.4 billion in 2026, and further to EUR 3.85 billion by 2028. The actual EPS for 2025 came in at 0.8, beating estimates of 0.778. The bank's cost-income ratio is expected to improve to mid-40s by 2028, driven by cost savings initiatives, including EUR 250 million in cost reductions, with 20% coming from AI-enabled process excellence.

Publication Date: Mar -03

📋 Highlights
  • Loan and Deposit Growth: Loan/deposit book expanded 6% in 2025, with 4% annual net lending growth expected over the cycle.
  • Capital Generation: Generated 270 bps of capital in 2025 (totaling 920 bps/EUR 5B over cycle), targeting EUR 3.7B net capital generation by 2028.
  • Cost Efficiency: Cost-income ratio to fall from 52% (2025) to mid-40s by 2028, EUR 250M in savings via AI (20% contribution) and process optimization.
  • Net Interest Income (NII): NII to rise from EUR 3.4B (2025) to >EUR 3.85B by 2028, driven by balance sheet growth and structural hedges.
  • Strategic Return on Equity: Target ROCE >16% by 2028 (+500 bps since 2025), with total income exceeding EUR 4.75B and CET1 guidance at 14.5%.

Growth Prospects

The bank's growth prospects are underpinned by Ireland's strong economic outlook, with average annual GDP growth forecast to be 3% out to 2028, and a population expected to increase by 17% by 2040. Bank of Ireland is well-positioned to capitalize on this growth, with a strong presence in Mortgages, Everyday Banking, Corporate & Commercial Lending, and Wealth and Insurance. The bank expects to see net lending growth of around 4% per year, deposit growth of 3%, and AUM growth of 10% over the next cycle, as noted by Myles O'Grady, "With Ireland's average annual GDP growth forecast to be 3% out to 2028 and a population expected to increase by 17% by 2040, we see a highly attractive market driving balance sheet growth."

Valuation and Dividend Yield

Bank of Ireland's valuation metrics appear reasonable, with a Price-to-Tangible Book Value (P/TBV) ratio of 1.34, and a Dividend Yield of 3.37%. The bank's Net Interest Margin (NIM) is expected to remain strong, driven by its structural hedge and balance sheet growth. The bank's guidance implies a strong capital generation capacity, with a CET1 ratio of 14.5% expected, and a progressive ordinary dividend per share supported by a payout ratio of around 50%.

Strategic Priorities

The bank's strategic priorities include continued business model momentum in Ireland, allocating capital to optimize returns, and investing for the future. Bank of Ireland is committed to harnessing the benefits of AI, while managing the associated risks. The bank's wealth business is expected to be a key driver of growth, with a focus on the affluent market and investments in digital and CRM capabilities. As Myles O'Grady noted, "Our wealth business accounted for just under 50% of our total fee income, and that's going to grow more."

3. NewsRoom

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Bank of Ireland Resets as Profits Slip, but Payout Rises

Mar -02

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Bank of Ireland Group PLC (BKRIF) Full Year 2025 Earnings Call Highlights: Strong Growth Amid ...

Mar -02

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Bank of Ireland Group Q4 Earnings Call Highlights

Mar -02

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Bank of Ireland UK fined £3.7m after introducing anti-fraud tool a year late

Feb -19

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Bank of Ireland revises motor finance redress costs to £350m

Oct -21

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Banks Warn of Heavier Hit From U.K. Car-Loan Redress

Oct -09

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3 European Dividend Stocks Yielding Up To 5.3%

May -16

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Bank of Ireland initiates ATM network upgrade

Apr -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.05%)

6. Segments

Corporate and Commercial

Expected Growth: 1.2%

The 1.2% growth in Corporate and Commercial segment of Bank of Ireland Group plc is driven by increased lending to large corporates, growth in transactional banking, and expansion in the UK market. Additionally, the segment has benefited from a strong focus on customer relationships, digital transformation, and cost management initiatives.

Retail UK

Expected Growth: 0.8%

The 0.8% growth in Retail UK from Bank of Ireland Group plc is driven by increasing consumer spending, low unemployment rates, and a competitive interest rate environment. Additionally, the segment has benefited from the bank's digital transformation initiatives, improved customer experience, and a strong brand presence in the UK market.

Retail Ireland

Expected Growth: 1.0%

Retail Ireland's 1.0% growth is driven by a stable economy, increasing consumer spending, and a growing demand for digital banking services. Additionally, the segment benefits from a strong brand presence, a large customer base, and a diversified product offering. Furthermore, strategic investments in technology and operational efficiency initiatives contribute to the segment's growth.

Group Centre

Expected Growth: 0.5%

Group Centre's 0.5% growth is driven by disciplined cost management, optimisation of operational efficiencies, and strategic investments in digital transformation, enabling the bank to maintain a strong capital position and support growth initiatives, while navigating a challenging low-interest-rate environment.

Wealth and Insurance

Expected Growth: 1.5%

Wealth and Insurance segment growth of 1.5% in Bank of Ireland Group plc is driven by increasing demand for pension products, expansion of insurance offerings, and strategic partnerships. Additionally, the segment benefits from a strong brand presence, diversified distribution channels, and a growing Irish economy.

Other Reconciling Items

Expected Growth: 0.3%

The 0.3% growth in Other Reconciling Items of Bank of Ireland Group plc is driven by increasing fee income from transactional services, higher interest income from liquidity buffers, and a slight decrease in operating expenses, partially offset by elevated regulatory costs and provisioning for potential credit losses.

7. Detailed Products

Personal Banking

Bank of Ireland Group plc offers a range of personal banking products and services, including current accounts, savings accounts, credit cards, personal loans, and mortgages.

Business Banking

The bank provides business banking services, including business current accounts, loans, overdrafts, and credit cards, to support small to medium-sized enterprises (SMEs).

Corporate Banking

Bank of Ireland Group plc offers corporate banking services, including cash management, trade finance, and risk management solutions, to large corporations and institutions.

Wealth Management

The bank provides wealth management services, including investment advice, portfolio management, and pension planning, to individuals and families.

Insurance

Bank of Ireland Group plc offers a range of insurance products, including life insurance, home insurance, and car insurance, to individuals and businesses.

Mortgages

The bank provides mortgage lending services to individuals and businesses, including residential and commercial mortgages.

Credit Cards

Bank of Ireland Group plc offers a range of credit cards, including cashback, rewards, and low-interest credit cards, to individuals and businesses.

8. Bank of Ireland Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Bank of Ireland Group plc is moderate due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low for Bank of Ireland Group plc due to the lack of pricing power and limited alternatives for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Bank of Ireland Group plc due to the presence of multiple suppliers and the bank's significant purchasing power.

Threat Of New Entrants

The threat of new entrants is low for Bank of Ireland Group plc due to the high barriers to entry and regulatory requirements in the banking industry.

Intensity Of Rivalry

The intensity of rivalry is high for Bank of Ireland Group plc due to the presence of multiple competitors and the need to maintain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.15%
Debt Cost 9.89%
Equity Weight 48.85%
Equity Cost 9.89%
WACC 9.89%
Leverage 104.71%

11. Quality Control: Bank of Ireland Group plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Bank of Ireland

A-Score: 5.5/10

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Growth: 6.2

Quality: 4.0

Yield: 3.1

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Volatility: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.6$

Current Price

15.6$

Potential

-0.00%

Expected Cash-Flows