June 13, 2018 / 7:07 AM / 3 months ago

Bank of Ireland to increase lending, invest in tech in push for growth

DUBLIN (Reuters) - Bank of Ireland plans to increase the size of its loan book and invest in front-end technology to improve profitability and efficiency, CEO Francesca McDonagh said on Wednesday ahead of the bank’s investor day.

The bank expects to increase its lending by around 20 percent over three years with 65 percent of that growth in Ireland and 35 percent internationally.

It is targeting a return on tangible equity of above 10 percent by 2021 versus 6.9 percent in 2017.

To support the growth and drive a reduction in costs the bank is planning to invest 250 million euros in its IT systems, which is in addition to 900 million euros of investment in banking systems previously announced.

The bank will invest 250 million euros in changes to its business model.

As a result, the bank expects to reduce its cost base by 200 million euros in 2021, and achieve a cost income ratio of around 50 percent in 2021, compared to around 65 percent in 2017.

The banking group is trading in line with expectations and the guidance provided at the group’s 2017 full-year results in February.

Reporting by Graham Fahy; editing by Jason Neely

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