Key Takeaways:
Bank of Ireland Group (LON: BIRG) set a new target to deliver a sustainable return on tangible equity of more than 16% by 2028, outlining a new strategic plan that builds on a strong 2025 performance that saw profits rise to €1.4 billion.
The plan, detailed at the bank’s annual general meeting, will focus on driving growth in its Irish franchises, optimizing its U.K. and international businesses, and investing in digital capabilities. "2025 marked the successful conclusion of the group’s three-year strategy and left Bank of Ireland in an unrivaled position as Ireland’s national champion Bank," Group Chief Executive Myles O’Grady said.
The bank’s performance in 2025 provided a strong foundation, with its loan book hitting €82.5 billion on 6% growth in Irish lending. Total income reached €4.2 billion, while the group delivered an adjusted return on tangible equity (ROTE) of 13.9% and maintained a robust CET1 capital ratio of 15.1%.
The new strategy signals a clear focus on boosting shareholder returns and operational efficiency amid what Chairman Akshaya Bhargava described as "geopolitical uncertainty, evolving customer expectations and rapid technological change." The target to lift ROTE above 16% and reduce the cost-income ratio to the mid-40% range by 2028 provides investors with a clear set of long-term performance goals.
The strategy through 2028 is built on three main priorities: enhancing the bank's mortgage, wealth, and everyday banking businesses in Ireland; disciplined growth in the U.K. and international segments; and investing in future capabilities like AI and data analytics.
Bank of Ireland is targeting average annual growth of 6% for its loan book, 4% for deposits, and 10% for wealth assets through the period. O'Grady said the bank entered 2026 with momentum, citing loan growth and strong net inflows to its wealth assets in the first quarter. The group’s wealth and insurance strategy, which includes its New Ireland and Davy brands, was highlighted as a key growth driver.
Bank of Ireland underscored its commitment to shareholder distributions, asking shareholders to approve a final dividend that brings the 2025 total to €0.70 per share, an 11% increase from the prior year. The dividend hike follows a €590 million share repurchase in 2025, with the bank announcing a further €530 million buyback in March.
In a move to streamline its structure, the bank is also proposing to cancel its listing on the London Stock Exchange, citing negligible trading volume compared to its primary listing on Euronext Dublin. If approved, the delisting would occur on June 29, consolidating trading and simplifying the company's listing structure. The bank also proposed an odd-lot offer to allow small shareholders to sell their holdings at a premium without brokerage fees.
This article is for informational purposes only and does not constitute investment advice.
