Bank of Ireland Group PLC on Wednesday maintained its financial guidance for 2024, despite recording lower net interest income in the year so far.

Shares were down 5.3% to €8.41 early Wednesday in London.

The Dublin-based lender said net interest income was down 3% in the nine months that ended September 30 from a year before. On a like-for-like basis, it was down 1%. Bank of Ireland said this was in line with its expectations, given lower interest rates in the eurozone.

‘This performance reflects the evolving interest rate environment, growth in lending income particularly in Ireland, higher funding costs (market and customer) and continued commercial pricing discipline,’ Bank of Ireland said.

It kept net interest income guidance for 2024 at about €3.55 billion, ‘notwithstanding modestly lower interest rate expectations’. This will be down 4.3% from €3.71 billion in 2023, though still well up from €2.49 billion in 2022.

Bank of Ireland now expects a year-end European Central Bank deposit rate of 3.00%, compared to its previous forecast of 3.25%. The deposit rate currently stands at 3.25%, after the ECB cut rates by 25 basis points earlier this month.

Turning to costs, Bank of Ireland said operating expenses were up 6% in the recent nine months, in line with expectations. Cost to income ratio was 45%. Its cost guidance for all of 2024 is unchanged.

Return on tangible equity is expected to be ahead of 2023’s 17.3%.

‘As we approach the end of the second year of our three-year strategic cycle, our highly capital generative and differentiated business model, operating in structurally attractive and growing markets, positions us well to continue to support our customers, invest in our business and deliver attractive returns for our shareholders,’ Chief Executive Myles O’Grady said.

The bank’s fully loaded CET1 ratio was 15.6% as of the end of September.

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