Bank of Ireland records higher net interest income due to rising rates

Bank of Ireland’s net interest income was 3% higher in the nine months to September 2022 when compared to the same period in 2021. Photo credit should read: Liam McBurney/PA Wire

Bank of Ireland recorded higher net interest income due to rising rates, its latest trading update showed.

The bank said it expects net interest income to increase between 6% and 7% this year, compared to 2021.

“Overall business momentum is positive. We are upgrading our net interest income guidance for 2022 to reflect the interest rate outlook,” said Gavin Kelly, Bank of Ireland Group interim CEO.

The ECB have raised interest rates three times already this year with more planned before the end of 2022 and in the first months of 2023. 

Many economists expect rates to peak at around 3% by summer next year.

Bank of Ireland’s net interest income was 3% higher in the nine months to September 2022 when compared to the same period in 2021.

“This performance is ahead of prior expectations and reflects the Group’s positive gearing to higher interest rates,” said the company.

Bank of Ireland has absorbed ECB rate hikes so far but is predicted to join AIB in raising its rates as further hikes by the European banking regulator are predicted.

The trading update also showed the company grew its customer base substantially due to plans by KBC and Ulster Bank to exit the retail banking market in the Republic.

In the first nine months of the year, the bank opened around 245,000 new current and deposit accounts, which is up 90% compared to the same period in 2021.

“The Irish economy continued to perform well, notwithstanding an increasingly uncertain environment and increasing inflationary pressures,” said Mr Kelly.

“We’re keenly aware of the impact of higher inflation on our customers, who we will continue to support over a challenging winter. Despite this, our asset quality remains strong,” he said.