Earnings triple at AIB as bad debts drop
AIB almost tripled its profits for the first half of this year, as the lender reduced the amount of cash it had set aside for bad debts and saw stronger than expected numbers from its business.
For the six months to the end of June, AIB said its pre-tax profits jumped to €1.24bn, compared to €437bn a year earlier.
Much of the profit growth was driven by a reduction in the provisions for bad debts by €540m.
That one-off gain will likely be followed by further writebacks over future periods. Impaired loans fell by €4.2bn to €18bn. The amount of impaired loans has fallen by more than a third since the end of 2013.
Similarly, the number of owner occupier mortgages classed as in arrears fell by 13pc, AIB said.
Importantly, the firm's core tier 1 capital ratio - a key measure of the lender's ability to withstand financial shocks - rose 2.3pc to 14.1pc overall.
The firm also said it would cut its standard variable mortgage rate (SVR) by a quarter of a per cent to 3.65pc.
Analysts welcomed the results. Davy Stockbrokers said the numbers were "well ahead of forecasts" while Investec called them "very strong".