Bank of Ireland Group plc (the ‘’Group’’) – Interim Management Statement – Q1 2018 update


The Group continues to trade in line with expectations.

Economic growth in our core markets of Ireland and the UK remained positive notwithstanding ongoing uncertainties related to the UK’s decision to leave the European Union.

Net interest income was in line with the second half of 2017. Our net interest margin is in line with our expectations and for the 3 months to March 2018 was 2.22%. Fees and other income were in line with sustainable business income in the second half of 2017.

The Group continues to expect that operating expenses for 2018 will be lower than 2017 and in that regard the Group has maintained a tight control over the cost base, while making appropriate investments in our businesses, infrastructure and people including our multi-year business transformation programme which continues to make progress.

Balance Sheet

Customer loan volumes were €76 billion at the end of March 2018, with new lending volumes exceeding redemptions by €0.1 billion during Q1 2018. Gross new lending in Q1 2018 was 20% higher than the same period in 2017. This included a 33% increase in new mortgage lending in Ireland where our market share was 28% for the first 2 months of 2018.

Asset quality across our loan portfolios has continued to improve in line with our expectations.

Customer deposits were €76 billion and wholesale funding was €13 billion at the end of March 2018.

Capital Position

The Group’s fully loaded CET1 ratio increased by a net 10bps from 13.6%* on 1 January 2018 to 13.7% at the end of March 2018. The Group’s organic capital generation during the period was partially offset by investments in risk weighted assets associated with new lending, investments in our business transformation programme, and a dividend deduction.

The Group’s regulatory CET1 ratio was 15.4%, and the Group’s Total Capital ratio was 19.4% at the end of March 2018.

The Group is continuing to engage with the ECB as part of its Targeted Review of Internal Models (TRIM) process.

*Fully loaded CET1 ratio at 31 December 2017 was 13.8%. IFRS9 transition adjustments reduced the ratio by c.20bps on 1 January 2018.