AIB to cut standard variable rate to 3.65pc for all customers, makes €1.2bn profit
Allied Irish Banks has announced that it will cut its standard variable mortgage rate for both new and existing AIB customers by 0.25pc to 3.65pc.
The reduction will come into effect during October. It will save customers on a €200,000 mortgage about €325 a year.
The bank also announced a 0.25pc reduction in its loan to value mortgage rate to 3.35pc, which will also come into effect during October.
The organisation made the announcement alongside its first half results which show that the bank made a pre-tax profit of €1.2bn, an increase of €800m compared to the same period in 2014.
Profits were boosted by a €540m write back of provisions made for bad debt, which went straight to the bottom line, as well as €100m worth of gains made from disposals and other items.
Lending approvals to customers increased by 21pc year on year to €6.9bn. Net loans and the banks loan to deposit ratio were broadly unchanged compared to December 2014, with net loans of €64bn and a loan to deposit rate of 99pc.
Operating expenses, excluding exceptional costs, were down by 6pc or €38m while impaired loans decreased by €4.2bn to €18bn.
Chief executive Bernard Byrne said: "In the first half of 2015 we continued to execute our strategy to transform the group and as a result we improved our underlying performance alongside the significant net provision writebacks and other additional gains.
"We also strengthened our balance sheet and reduced risk by further significant reduction in impaired loans. We remain focused on delivering a bank with market leading capital returns and a clear and transparent risk profile."
Chairman Richard Pym added: "These results are extremely encouraging and reflect the support of our customers, the efforts of our staff and the recovering national economy.
"The financial outcome for the half-year is significantly ahead of the expectations we had at the beginning of the year and reinforces our endeavours to see all of the €20.8bn invested in AIB by Irish taxpayers repaid.
"Whilst any decision on a future sale of AIB is entirely one for the Irish Government, the results so far this year significantly improve the prospects for a successful transaction whenever it happens."