The bank said the increase largely reflects growth in its Irish Everyday Banking division – household savings – which was partially offset by lower corporate deposits and an foreign exchange impact of €1bn.
The numbers indicate the continued preference of Irish savers for low performing but safe and highly accessible savings options.
Bank of Ireland said the flow of savings into term accounts and other products in Ireland was €1.5bn this year, in line with expectations.
There have been widespread calls including from industry to tap the massive glut of household savings to support everything from highly speculative start-ups to capital intensive infrastructure schemes, however, savers themselves appear to be a key block on such developments.
The savings glut is good news for banks, with low return deposits providing a pool of capital to support lending.
Bank of Ireland published an Interim Management Statement on Wednesday for its performance in the three months to September 30.
It shows strong momentum and business performance as it nears the end of its current three-year strategy, the bank said.
That includes growth in Irish loans, deposits and assets under management, alongside disciplined cost control and high levels of capital generation.
The bank retains its positive outlook to 2026 and beyond.
CEO said Myles O’Grady, said that is driving the banks bottom line.
“These are translating into high levels of net organic capital generation, supporting further balance sheet growth, investment in our business model and attractive shareholder returns.”
“While we remain vigilant to the evolving international backdrop, the Irish economy continues to be resilient and growing,” he said.
The bank said net interest income, a key measure of bank cashflow, is running modestly ahead of expectations. It upgraded full year guidance to above €3.3bn.
Net lending stood at €82.2bn, including growth of 5pc in the Irish loan book.
Retail Ireland net lending increased by €2.0bn, driven by continued strong growth in mortgages. Our mortgage market share of new lending3 was 41% YTD
Business income is also up. However, operating expenses also increased, up 3pc year on year.
The bank confirmed that its provision for a costs including compensation linked to a UK motor finance scandal could increase to about £350m (€400m) from an initial £143m (€167m). The higher amount being set aside reflects an expectation that more people will be in line for greater levels of compensation, based on a report by UK regulators that was published this month.
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