Bank of Ireland Group plc

Good morning, everyone. I'm Eamonn Hughes, Investor Relations Officer, and you're all very welcome to Bank of Ireland's 2025 results and strategy update. Myles will shortly take you through an overview of our business and how it performed over the last cycle. Mark will then go through the key points from our 2025 financial results. And then we'll turn to our strategy update, covering our plans for the next three years to 2028. We'll then wrap up with the investment case for the group and open to the floor for your questions. Over to you, Miles.

Good morning, everyone, for those with us in person in London and those on the call. You're very welcome to our 2025 results and strategy update. I'd like to start by giving you an overview of the unique shape and deep reach of Bank of Ireland's franchise. Put simply, we have an unrivaled position in Ireland with complementary international businesses. What you see on the first slide is that unrivaled position across mortgages, everyday banking, corporate and commercial lending, and welcome insurance. Our position is underpinned by four long-established respected brands, Bank of Ireland, Davey, New Ireland, and Bank of Ireland UK. This embeds the group into every community in Ireland, its economy, and indeed its society. This is key to our growth over the coming years, complemented by supportive businesses outside of Ireland. Being embedded in Ireland means being embedded in one of Europe's fastest-growing economies. This is a highly attractive market driving balance sheet growth. Ireland's average annual GDP growth is forecast to be 3% out to 2028, and its demographics are also highly supportive. These include a population expected to increase by 17% by 2040, the structural growth story in wealth management, sustained credit formation, and at this point, private sector credit grew 6% last year, and Ireland's national development plan. This plan aims to drive Ireland forward with a $275 billion public investment in infrastructure, unlocking economic and balance sheet growth. We're also mindful of the risks presented by the geopolitical uncertainty. Ireland is navigating these risks well, with a resilient and growing economy. Healthy public finances can help to shield against volatility, and Bank of Ireland's strong balance sheet is well positioned to manage potential future challenges, underpinning a bright future for the group. Bank of Ireland's unrivaled position in Ireland and the strength of the Irish economy come together on slide eight. This combination is driving outstanding business performance. Over the past three years, new-to-bank customers increased by 18%. We have significantly improved customer satisfaction. This is being supported by the bonitude momentum you see here. Our Irish loan and deposit book grew 6% in 2025, while wealth assets under management increased by 9% to an all-time high. Capital generation was 270 basis points last year, bringing the total over the cycle to 920 points. That's 5 billion of capital generation. On slide 9, we recap on the returns profile since 2022. In early 2023, we committed to a range of financial targets which have been delivered. That's ROTI, Cost Income Ratio, a progressive dividend and returning surplus capital. This performance has supported strong distributions, totaling 3.6 billion over the last cycle, equivalent to 37% of our starting market capitalization. And for 2025, this includes 1.2 billion of distributions, which equates to 100% total payout of earnings, comprising a progressive dividend per share of 70 cents and the 530 million approved shareback we are announcing today. We enter 2026 and our new cycle to 28 with real momentum and strong capital generation. And I'll share more on this with you shortly. For now, I'll pass over to Mark, who will take you through last year's financial performance.

Thanks, Miles, and good morning, everyone. We've had a strong financial performance in 2025. Slide 12 sets out the key highlights, including efficiency. continued momentum in Irish loans and deposits, both up 6%, growing fee income, led by our wealth and insurance franchise, ongoing cost discipline, and robust asset quality. All of these contributed to capital generation of 270 basis points and support total shareholder distributions of 1.2 billion. Subject to shareholder approval, the ordinary dividend would be 70 cents per share, up 11% compared to last year, reflecting our confidence in the bank's prospects. We've had a good NII performance in 2025, with balance sheet growth, bond purchases, and our structural hedging helping to counter the impact of lower interest rates and planned deleveraging. We expect NII to grow from 2025 levels to around 3.4 billion in 2026, above our expectation of the pi-3-3s. The key dynamics here are business momentum and hedging playing remaining interest rate and deleveraging impacts, including our recently announced intention to run down our US acquisition finance book. We expect stronger growth in 2027, where we are upgrading our prior guidance of the mid three fives with NII of greater than 3.6 billion now expected. As part of our strategy update, we've published new guidance for 2028 today, with NII of greater than 3.85 billion expected, with the potential for further upside beyond. The support of Irish macro backdrop that Miles spoke to earlier, and the breadth of our franchise, both contributed to the strong growth in Irish loans in 2025. Our Irish mortgage business had another excellent year, with a greater than 40% share of new lending for the third year running, while retaining our commercial and risk disciplines. International corporate contracted, as planned, due to the portfolios and runoff, and FX was a headwind in 2025. In 2026, we expect to see net lending growth of around 4%, once again led by our Irish books. We saw good growth in customer balances in 2025, This is led by our Irish everyday banking propositions, where flow-to-term dynamics reduced as expected. Retail UK balances were higher, with a good performance by our Northern Ireland business. For 2026, our expectation is around 3% growth in deposits, led by continued strong growth in Irish everyday banking. Slide 16 provides more detail on our structural hedge. which is one of the key drivers of our NII trajectory into 2028 and beyond. Rollovers and additions meant the average yield in the hedge rose 16 basis points to 189 in 2025, with an exit yield of 198. And there's more to come this year. Helped by our modest growth in our hedge volumes and the rollover dynamic, we see fixed-leg income increasing by 10% in 2026. The group's total fee income increased by 7% last year. Wealth and insurance, which now counts for nearly half of total fee income, had a really good performance, with fee income up 12%, reflecting the benefits of our strategic execution over the past three years. For 2026, we expect to see around 4% growth in fee income, driven by wealth and insurance. Operating expenses rose 3% last year, meeting our guidance. Staff and other costs were higher. This reflects a number of factors, including wage inflation in the competitive Irish labour market and ongoing investment in digital capabilities and customer experience. Efficiencies for our restructuring investment activity were equivalent to around 2% of the cost base. And we'll see more of this over our new strategic horizon. On slide 18, I'd also note the non-core charge of £430 million. The majority of this relates to UK Motor Finance. €1.53 million of restructuring costs support the delivery of our efficiency programme. One presentational change to call out here is that from 2026 onwards, restructuring costs will be included above the line. We expect to see total costs of around €2.2 billion in 2026. This is comprised of two parts. Firstly, underlying operating expense growth of around 2%. reflecting inflation and investment, including targeted higher investment to support strategic delivery, offset by efficiencies. And secondly, restructuring costs that are expected to be in line with the 2025 outturn. Looking further out, we expect total costs to be stable at around €2.2 billion over the strategic cycle. Moving now to slide 19. The impairment charge in 2025 was 193 million, or 23 basis points cost of risk, better than we had anticipated following a strong final quarter. Within that, net loan loss experience and portfolio activity was 65 million euros, with net writebacks in H2 reflecting the team's execution on the ground. Macroeconomic and model updates account for the balance of the charge, with a geopolitical PMA of €40 million providing protection against potential volatility. The NPE ratio finished 2025 at 2.2%, down 40 basis points in June, reflecting the H2 progress. Looking ahead, we expect the cost of risk to be in the low to mid-20 basis points. The group is a very capital-generative business model. Organic capital generation was 270 basis points last year, Around a quarter of this was consumed by investment in lending and CRT amortization. IRB model scalers consumed a further 40 basis points, with an objective to at least partially mitigate these over time. We've today announced distributions totaling 225 basis points in respect of 2025 performance. Our reported CDT1 ratio was 15.1% after 1.2 billion of distributions, with a 100% total payout ratio which compares to 80% last year. For 2026, we expect net organic capital generation of around 250 basis points. We've updated our CUT1 guidance for the new strategic cycle to around 14.5%, which we believe is an appropriate level to both protect the bank and support the ambitious growth plans we are setting out today. Our objective is to operate at this new CUT1 guidance. Slide 21 recaps the building blocks of our 2026 financial guidance that produce around 12.5% statutory ROTI expectation for 2026. On this slide, I would note the changes to the presentation of a number of our key metrics. Having taken on board market feedback and reflecting on peer approaches, from 2026 onwards, we will simplify our reporting by including restructuring costs within our operating expenses and within our cost-income ratio, and presenting ROTI on a statutory basis. To conclude, as we start 2026, we have real momentum across our franchises, which sets us up very well as we start our new strategic cycle. I'll pass you over to Myles now, who will take us through our new strategy.