Business Irish

Wednesday 17 September 2014

Taxpayers will not lose money on the bailout of AIB - bank chief

AIB to launch portable tracker mortgage product - CEO

Published 19/06/2014 | 10:25

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Taxpayers will not lose money on the bailout of AIB, its chairman has claimed.

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The cash can be repaid, he said, with significant amounts potentially coming back to taxpayers in the next few years,

"(It is) definitely a realist prospect, I think we can make substantial re payments in the years to come," David Hodgkinson said.

It's the most optimistic any senior official has been about the prospects for making a recovery on the €20.8bn rescue of the bank.

The State is already in profit on the rescue of Bank of Ireland.

Earlier, shareholders heard that Allied Irish Banks will launch a portable tracker mortgage product on July 1, chief executive David Duffy told shareholders at the bank's AGM today.

It will allow people to move home without losing their tracker deal.

The move follows on from similar offerings from the likes of Permanent TSB and Bank of Ireland.

Meanwhile, shareholders also heard earlier that the bank could pay off the €20bn cost of its State rescue, chairman David Hodgkinson.

However, he also admitted that it is likely to be 20 years before AIB has to pay any corporation tax in Ireland even after it returns to profit, chairman David Hodgkinson said.

He was agreeing with a shareholder who said the deferred tax assets the bank has accrued because of record past losses means it could be 30 years before the bank is hit with a corporate tax bill.

Earlier shareholders heard that chief executive David Duffy has signed a permanent contract to head up the bank.

The bank's most senior executive had been on three year contract due to the end this year, the bank's annual general meeting had been told.

Mr Hodgkinson made the announcement to the effectively nationalised lender's sparsely attended AGM, which is taking place at its headquarters in Dublin.

Lending drawdowns by AIB customers were 60pc higher in the first three months of the year, compared to 2013, the chairman said.

The bank's priorities for customers in financial distress are to keep "private dwelling mortgage customers in their homes where possible," to secure the future of "viable companies" and to deal with all cases fairly, the chairman told the AGM.

He added that the bank has paid more than €2bn to the State in fees and interest on rescue loans since the crash.

The lender is examining options to reduce the number of shares outstanding from the current 523 billion, almost all of which are in State hands, as part of a planned simplification of its capital structure.

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