Analysts expect AIB to announce profits of more than €100m
Published 30/07/2014 | 02:30
State-owned AIB is expected to confirm the bank's return to profits for the first time since the financial crash today.
Managers at the bank said it returned to underlying profitability at the end of the first quarter of 2014, but did not provide specific numbers.
The bank, led by chief executive David Duffy, will announce its financial results for the first half of the year today, when the return to profit is expected to be confirmed with numbers provided to the market.
Analysts at Cantor Fitzgerald said yesterday that they expect the bank to announce profits before tax of €186m for the first six months of the year, with net interest income up by over 20pc and a sizeable boost to other income from one-offs, including asset disposals and the payment for the first time of the discretionary coupon on the NAMA subordinated bonds.
Meanwhile, Eamonn Hughes at stockbrokers Goodbody said profits at AIB will be €100m for the first six months of the year, compared to a loss of €758m in the same period of 2013.
The return to profit is an important milestone for the bank, which was nationalised following a €20bn bailout by taxpayers.
Following last week's improved results from Ulster Bank, investors will pay particular attention to AIB's impairment charges, which are expected to have slowed thanks to the improving property sector in particular.
In a note to investors Mr Hughes said he expects impairments to be €274m for the six months - a €450m turnaround compared to a year ago.
Bank of Ireland will publish its latest financial results on Friday.
The results will provide some guidance ahead of the publication later this year of the results of stress tests on the Irish bank, with retained earnings and impairment levels key inputs to the banks' overall capital.
Meanwhile, European authorities have cleared the transfer of the last tranches of loans from the Irish banks to the National Asset Management Agency (NAMA).
The European Commission found this transfer to be in line with the approved programme and with its guidance on the treatment of impaired assets, it said in a statement. The loans have already been transferred from the banks to NAMA.