The bank’s bottom line also took a hit from a charge of €430m, including a UK motor finance provision of €264m to cover the costs of a redress scheme for British consumers.
However, the results for the year were better than the market had anticipated.
Irish lending increased by 6pc, as did deposits, and wealth assets under management increased by 9pc, the bank said.
The bank’s net interest income was €3.37bn, slightly above expectations, and non-interest fee income, including through its Davy arm, and New Ireland Assurance was €816m in 2025, up 7pc.
Assets under management increased by 9pc last year, to a record €60bn.
Asked whether the bank expects Finance Minister Simon Harris’ plan for a new savings and investment product to impact deposits, Bank of Ireland CEO Myles O’Grady said he expects deposits to grow by around 3pc this year, even as more customers move a share of their savings into term products.
Mass affluence is creating a market for investments, he said. On the island of Ireland, Bank of Ireland thinks around 150,000 of its two and a half million customers would be suitable candidates for a wealth product, he said.
For investors who own Bank of Ireland shares, the bank said it plans to return €1.2bn through dividends and share buybacks, equal to the bank’s entire after-tax profit for the year.
The bank’s shares were down sharply today, the worst performing stock on the Irish market, but that was in a wider context of concerns about the impact of the war in Iran on bank shares.
“Overall, Bank of Ireland delivered a solid 2025 performance, with profits coming in ahead of expectations thanks to lower-than-anticipated impairments and continued balance-sheet resilience,” said Denis McGoldrick, an analyst with Goodbody Stockbrokers, which is owned by AIB.
Bank of Ireland finished a three-year strategic cycle last year, and kicks off a new one in 2026. Mr O’Grady said it had closed out its 2023-2025 strategic cycle on a very strong footing.
“Over the past three years, the Irish loan book grew by 33pc, Irish deposits by 11pc and wealth assets under management by 54pc,” he said.
“This excellent business performance enabled strong shareholder returns of €3.6bn through buybacks and dividends, supported by consistent execution on the financial targets that we set for the group, where we delivered an average 16pc adjusted ROTE, beating our target,” he said.
Bank of Ireland shares ended today at €16.065 each, which was down around 2.84pc on last Friday’s closing price.
Bank shares across Europe were beaten up today after the outbreak of war between the US and Iran, though Bank of Ireland was the worst performing Irish bank share on the day.
AIB is due to report its full-year results on Wednesday, followed by PTSB on Thursday.
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