Wednesday 26 November 2014

AIB reveals return to profitability

Published 30/07/2014 | 08:09

AIB Chief Executive David Duffy has hailed the institution's return to profitability as the economic recovery continues
AIB Chief Executive David Duffy has hailed the institution's return to profitability as the economic recovery continues

Allied Irish Banks (AIB) has announced a return to profitability with a 1.3 billion euro turnaround in its business.

Detailing its results for the first half of the year, the banking group, which is 99% owned by the Irish state, said it had achieved profits before tax of 437 million euro.

David Duffy, chief executive, said the bank was meeting it targets.

"AIB has achieved its stated aim of returning to sustainable profitability on a post-provision basis in 2014 with our half-year results reflecting strong improvements in margins, funding position and capital ratios," he said.

"The group has demonstrated its capacity to support economic recovery with loan approvals, including the UK, of 5.6 billion euro, up 33% year on year.

"Our mortgage arrears and overall levels of impaired loans are reducing and our performance in the first half of the year saw a material reduction in provision charges.

"As the Irish economy and the bank recovers, we remain focused on growth and maximising value for the Irish State, as 99.8% shareholder, and all other stakeholders over time."

AIB has lent out 4.6 billion euro in the Irish economy in the first half of the year.

It said the value of its total impaired loans decreased by 2.9 billion euro, 10%, since December last year.

And it also announced that the number of mortgage accounts in arrears in the Irish residential portfolio has fallen by 6%.

AIB said its pre-provision operating profit was 395 million euro higher than in the first half of last year.

The figures in the half-year report compare with losses of 838 million euro in the half-year to June last year.

The latest results show the total impaired loans in the banking group have come down from 28.9 billion euro in December last year to 26 billion euro in June, and are down by 11% over the last 12 months.

Mr Duffy described the improvement in AIB's business as a milestone.

AIB said that by June 30, although 34,000 of its mortgage accounts were in arrears of more than 90 days, almost two thirds of these customers have engaged with the bank and o ffered a sustainable solution.

Some 8,000 new arrangements have been finalised.

The group said it now employs 11,385 staff, a reduction of 10%.

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