Bank of Ireland - Growth in balance sheet and additional efficiency measures to drive earnings growth

Davy Research
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Bank of Ireland’s (BOI) investor day set out ambitious lending growth targets together with an acceleration of efficiency gains. While capital is somewhat lower as a consequence of these initiatives, we see the growth in sustainable earnings in the coming years as more than offsetting this. In our view, financial targets are conservatively set, with higher net interest margin (NIM) and return on tangible equity (ROTE) likely. We re-iterate our ‘Outperform’ rating, while upgrading our price target to 900c per share (from 890c).