Ariel International Fund on Bank of Ireland Group plc
Thesis
Ariel sees improving profitability and returns at Bank of Ireland as a reason for continued valuation upside. Better operating leverage and disciplined expense control have strengthened earnings and driven a re-rating. The fund believes the market still underestimates the bank's longer-term efficiency program. It also sees meaningful ability to return capital to shareholders as performance improves.
“the market is beginning to recognize the bank’s improved return profile”
Key risks
- Higher-for-longer interest rates and changing monetary policy
- Delivery risk around the longer-term efficiency program
- Ability to sustain operating leverage and recent profitability gains