Friday 15 November 2019

AIB unites property arms to work with construction

AIB’s David Duffy (centre). The firm is ramping up lending for the construction sector
AIB’s David Duffy (centre). The firm is ramping up lending for the construction sector

John McGee

AIB has consolidated its property lending activities into one unit which it is hoped will "dynamically engage" with the construction and property industry.

The new unit, which will be headed by AIB corporate and insitutional banking head David Renwick David Renwick will act as what the bank is calling a "centre of excellence" for all of its property-related finance activities.

"To reflect the considerable changes that have taken place in the marketplace over the past few years, the bank's new property lending unit has a multi-disciplinary team of professionals that includes chartered surveyors and engineers, working alongside experienced property lenders," said Mr Renwick.

"The reality is the market has changed over the past few years and typically, customers now use a mixture of equity, mezzanine finance and senior debt when it comes to funding their projects.

"In the past most of the finance required probably would have come from a bank.

"For AIB, it's all about being relevant to our customers and having in place the products and services that the changing marketplace requires," he says.

Acknowledging the role that the Irish banks have to play in the wider economy, Mr Renwick added that AIB is "open for business" and the newly focussed property lending unit will actively support the anticipated growth of the construction and property sectors over the coming years.

The lender, which is 99pc owned by the state, earlier this month announced a profit before tax of €1.1bn for 2014, its first annual profit since 2008.

The bank announced €13.2bn in lending approvals in 2014, a 37pc increase on the previous year, while it said lending drawdowns rose by more ethan half to €5.9bn.

"In AIB, we have a strong momentum in our business and we are committed to supporting our customers by understanding their needs, providing suitable solutions and serving them through our branches, online and on the phone," said he said.

"We are focused on growing lending to support the Irish economy and delivering sustainable returns for our shareholders," he said.

"AIB takes its responsibilities to the wider Irish economy very seriously and clearly the Irish construction and property market is an important component of the economy,'' Mr Renwick added.

The €350m fund that AIB set up last year to provide finance to house builders across the country has met with considerable success.

"We have a very steady and active pipeline at the moment but there is still capacity to lend and we are very optimistic about the housing sector overall and its ability to provide an adequate supply of housing stock over the next few years.

"In the commercial and investment market, we are seeing a return to stability and that's good everyone in the market, including the banks, after difficult years," he said.

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