Bank of Ireland targets return to dividend payments in 2017

The country´s self-described largest lender reported a 30% increase in underlying profits before tax for 2015 to €1.2bn, as the group´s new lending jumped by over 40% to reach €14.2bn.

The group said in a statement its goal was re-commence dividend payments, in respect of 2016, in the first half of 2017, progressively rising to around 50% of sustainable earnings.

That was more or less in line with the 18% pay-out forecast by Credit Suisse for 2016 and its the same broker´s estimate for the payout to rise to 48% of fiscal year 2017 earnings.

In parallel, its fully-loaded common equity Tier 1 capital improved by 200 basis points to 11.3% (Credit Suisse: 11.1%), for a cumulative 500 basis point rise over the last two years.

So-called non-performing loans, a barometre of credit quality, were reduced by a further €3.8bn.

Net interest margins improved by eight basis points, with customer deposits accounting for more than 90% of its funding.

However, Credit Suisse analyst David Da Wei Wong said in a research note sent to clients that guidance for net interest margins was softer than he´d been expecting, although that was offset by better-than-expected guidance on provisions.

Commenting on the results, Bank of Ireland chief Richie Boucher emphasised that all of its trading divisions were profitable and had contributed to the institution´s financial performance during the period, which was benefitting from the recovery in the country´s economy.

On 4 February the European Commission projected Ireland´s gross domestic product would grow by 4.5% in 2016 abd 3.5% in 2017, following the blistering pace of 6.9% seen in 2015.

At €458m underlying second-half PBT was 3% ahead of Credit Suisse´s own estimates and revenues, at €1.23bn, 1% better than forecast by the Swiss broker.

As of 15:03GMT shares in Bank of Ireland were standing 4.86% higher at €0.26, following an approximately 23.5% retreat year-to-date.