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August 06.2025

2 Minutes Read

Why Bank of Ireland's Mortgage Lending Down 8% Matters to Financial Institutions

Coins and model house symbolizing Bank of Ireland mortgage lending decline.

Bank of Ireland Sees Mortgage Lending Decline

The Bank of Ireland has reported a significant decline in its gross UK mortgage lending for the first half of the year, falling 8% from £1.2 billion to £1.1 billion. This decline was confirmed during the bank's interim financial results announcement, highlighting a challenging environment for mortgage lenders.

Understanding the Factors at Play

The bank's retail UK mortgage portfolio has also shrunk slightly in value, down to £13.3 billion in June from £13.4 billion at the end of December. A key factor contributing to the reduced lending is the lower net interest income, which has been attributed to lowered mortgage margins resulting from falling base rates over the same period. This environment has made it less lucrative for banks to issue new mortgages, thereby impacting lending volumes.

Profitability Amidst Decline

Despite the slump in mortgage lending, the Bank of Ireland reported a profit before tax of €0.7 billion (£0.61 billion). Group chief executive Myles O’Grady reassured stakeholders that the bank remains on track to achieve its full-year targets, indicating a resilient operational model in the face of market fluctuations.

Market Trends to Watch

Last year, the Bank of Ireland completed an impressive £2.4 billion in gross mortgage lending in the UK, an increase from £1.7 billion in 2023. As the market continues to evolve, financial institutions and service providers should closely monitor these trends and adapt strategies accordingly. With changing base rates and consumer demand impacting the housing finance landscape, a proactive approach will be essential for success.

What This Means for the Industry

The current downturn in mortgage lending is a critical indicator of the broader economic landscape. Stakeholders should remain vigilant, considering how shifts in interest rates and consumer behavior will likely continue to shape their operations. Understanding these dynamics can empower financial institutions to navigate these challenges more effectively.

For financial institutions and service providers, being aware of these implications is essential for adjusting to the ever-changing demands of the market.

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Why Bank of Ireland's Mortgage Lending Down 8% Matters to Financial Institutions

Bank of Ireland Sees Mortgage Lending Decline

Understanding the Factors at Play

Profitability Amidst Decline

Market Trends to Watch

What This Means for the Industry

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