Bank of Ireland shares climb 5.5% on outlook

Bank of Ireland, now led by new CEO Myles O'Grady (pictured), the shares have also been driven by the additional pricing power commanded by Irish lenders as rivals, Ulster Bank and KBC Bank, prepare to close their doors in the Republic.

Shares in Bank of Ireland climbed 5.5% after the lender increased its net interest income target for the year, and reassured over the changes to its insurance and wealth business from accounting changes. 

The performance of many bank shares across Europe has been helped as the European Central Bank and the Bank of England hiked interest rates because the lenders tend to generate more income as a result.  

In the case of Bank of Ireland, now led by new CEO Myles O'Grady, the shares have also been driven by the additional pricing power commanded by Irish lenders as rivals, Ulster Bank and KBC Bank, prepare to close their doors in the Republic.

Bank of Ireland shares have now soared by over 70% this year, to value the lender at over €8.85bn. 

In the update, the bank said that "reflecting the evolving interest rate environment", net interest income will increase 10% this year, up from its earlier guidance for an increase of up to 7%.

It also detailed the effects of changes in accounting rules will have on its insurance and wealth operations. 

John Cronin, banking analyst at Goodbody, said the new guidance would lead to upgrades in the bank's pre-tax estimates. 

However, he said that the market had already taken on board much of the improved outlook for Irish banks, but, was a "slight positive nonetheless".