At the heart of BoI's strategy is a bet on the housing recovery
Bank of Ireland is betting that a housebuilding revival will be the catalyst to boost profits over the next three years and help drive a 20pc expansion in its loan book.
In a wide-ranging strategy plan released yesterday, new CEO Francesca McDonagh argued that the elimination of the current housing undersupply will underpin growth ambitions.
She sees 65pc of the bank's targeted loan growth coming from the Irish market.
The bet on growth in residential property output, off a low base, could pay off. But it hasn't happened through the past five years of sustained recovery. How soon will that change?
The plan also sidesteps recent warnings that a new bubble is brewing in the economy, including from the Organisation for Economic Co-operation and Development (OECD).
But Ms McDonagh played down those concerns, arguing the group does not view the economy as being in bubble territory.
"We are very diligent and outward-looking and risk aware" and stressed "we do not believe the [Irish market] is at risk of overheating", she said at a presentation to analysts in London.
The bank's bullish outlook rests on three key assumptions: economic growth is real as opposed to credit-fuelled; a "rule-book change" continues to keep a lid on the pace of lending; and finally the market remains some way off its boom-time peak.
Ms McDonagh claimed lending volumes remain 20pc below the height of the last cycle, "if anything" the scale of lending could "double for an economy of Ireland's size".
With only half of the 40,000 units required annually built last year, the yawning gap between supply and demand remains to be filled.
Yet banks have bet big on the property market in the past and history shows the dangers of relying too heavily on such a cyclical sector.