M&T has revealed earnings hike after AIB sale
Published 21/10/2010 | 05:00
THE US bank that AIB effectively sold out of less than a fortnight ago last night revealed a 50pc surge in earnings for its latest quarter.
But market sources quashed speculation that the Irish bank would have gotten a better price for its stake after the expectation-beating results, since M&T's shares are trading below AIB's price.
On October 6, the Irish bank charged investors $77.50 (€55.51) for notes that can be exchanged for M&T shares once the deal is approved at an upcoming meeting of AIB's shareholders.
Shares in M&T hovered between about $73.90 and about $76.40 yesterday, well below the price of AIB's offer and the $83 they'd be trading at before the deal was announced.
The detail of yesterday's expectation-beating results showed M&T's net income rose to $192m or $1.48 a share from $127.7m or 97 cents a year earlier.
Estimates from 22 analysts surveyed by Bloomberg averaged $1.41 a share.
The increased profit marked the fifth-straight quarter of higher earnings at M&T, one of the three biggest US banks that hasn't reported a quarterly loss since 2008.
The lender set aside $93m for credit costs, a 40pc decrease from a year earlier, according to the statement. Debts considered uncollectable declined 34pc to $93m.
"Credit costs remain well-controlled," Chief financial officer Rene Jones said. "This represents a welcome sign of the improvement in economic conditions relative to a year ago." (Additional reporting Bloom- berg).