Wednesday 23 October 2019

AIB rules out deals and hikes dividend to send €330m to taxpayers

Incoming boss Colin Hunt
Incoming boss Colin Hunt
Donal O'Donovan

Donal O'Donovan

AIB bosses ruled out significant takeover activity this year after hiking a dividend that will include around €327m paid out to taxpayers.

Majority State-owned AIB yesterday reported full-year pre-tax profits of €1.41bn for 2018, down from €1.57bn a year earlier. Banks' ability to bring forward tax benefits from losses during the crash means AIB profits are effectively free from corporation tax. However, the State's 71pc shareholding means taxpayers are in line for the bulk of a proposed dividend of 17 cents per share, or €461m - up 42pc from last year. AIB followed Bank of Ireland in returning cash to shareholders despite the imminent risks of a no-deal Brexit. At at 17.5pc, the bank's regulatory capital - an indication of the ability to withstand shocks - is well in excess of requirements.

Incoming chief executive Colin Hunt said management has no plan to shift strategy and ruled out takeovers.

AIB has "no plans to engage in any significant M&A activity over the year ahead", he said. The collapse of a Chinese bid for Goodbody Stockbrokers had sparked speculation that AIB might try to buy the firm it sold following the financial crash when it also exited overseas markets.

With AIB now largely focused on its home market, new chief financial officer Donal Galvin said 10pc of its balance sheet is directly exposed to Brexit.

The results shows new lending grew 15pc and AIB has a 32pc share of mortgage lending. Its non-performing loans are down to €6.1bn, although loan sales to cut that further are on the cards. AIB's net interest margin fell to 2.47pc but remains ahead of peers.AIB shares fell 2pc yesterday tp €4.052, well below its IPO price of €4.40 in June 2017.

Irish Independent

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