Saturday 23 September 2017

AIB planned stock market flotation likely put on hold if Government falls

AIB is the first of the Irish banks to pay dividends since 2008

AIB (Stock picture)
AIB (Stock picture)

Donal O'Donovan & Louise Kelly

AIB's planned stock market flotation would likely be put on hold if the Government falls.

CEO Bernard Byrne said the ultimate decision to push ahead with a sale of a 25pc stake in the bank this year is in political hands because the shares are State owned.

"At the end of the day this is fundamentally a political decision," Bernard Byrne said.

He said AIB is confident that conditions are positive for the planned share sale. The sale of 25pc of the bank is Government policy, but that could change if the Government falls.

Earlier today, AIB announced pre-tax profits of €1.7bn for the year end 2016 as it proposes a dividend of €250m to ordinary shareholders.

The bank said that the "milestone year" has been driven by strong sustainable business performance, net credit provision writebacks of €294m and one-off benefits including the Visa Europe transaction.

Bernard Byrne ceo of AIB which is to announce results today
Bernard Byrne ceo of AIB which is to announce results today

AIB is the first of the Irish banks to pay dividends since 2008. Mr Byrne also said that the bank was ready for a stock flotation.

“2016 has been another milestone year for AIB Group. Our strong financial performance and robust capital base support our proposed dividend of €250m to ordinary shareholders," Mr Byrne said.

"This reflects our sustainable profitability, strong capital generation and focus on delivering for shareholders and customers."

Mr Byrne said that AIB returned a further €1.8bn to the State during the year, which together with the proposed dividend, brings to €6.8bn the amount AIB will have paid in capital, dividends, fees, coupons and levies.

"The bank is now ready for an IPO, when market conditions permit and the Minister decides," he said.

"With a market leading franchise, strong customer focus and investment in digital, AIB Group is well placed to continue to support our customers and the growing Irish economy.”

 

Additional financial highlights

*28bps increase in net interest margin* (NIM) to 2.25pc from 1.97pc; continued expansion with the spread widening between yields on assets and liabilities and redemption of legacy instruments

*Cost income ratio of 52pc with operating expenses** increased by 7pc in line with expectations to €1.4bn; and €870m strategic investment programme, commenced in 2015, continuing to deliver efficiencies, improved customer satisfaction and capacity for growth

*€12.9bn in new lending approvals to customers; €8.7bn of drawdowns; 16pc increase in new lending in Ireland

* Impaired loans reduced to €9.1bn, down c. €4bn since December 2015 and c. €20bn since December 2013

*Robust capital base with transitional common equity tier 1 (CET 1) ratio of 19pc and fully loaded CET1 ratio of 15.3pc well in excess of the 2017 SREP transitional CET 1 requirement of 9pc

* €1.8bn Contingent Capital Notes (CoCo) repaid to the State in July 2016. Total payments of c. €6.8bn to the State including the €250m proposed dividend payment

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