Thursday 17 January 2019

Non-performing loans reduce by 10pc in three months at AIB

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Ellie Donnelly

Ellie Donnelly

Non-performing loans (NPLs) at AIB reduced by 10pc or €1bn in three months to March 2018.

NPLs now stand at €9.2bn at the bank, down from €10.2bn in December.

The reduction was driven by both case resolutions, which accounted for around €400m of the reduction, as well as the impact of harmonisation of definitions of defaulted loans under the International Financial Reporting Standards (IFRS).

In a trading update this morning the bank said that the normalisation of NPLs remains a key focus and a strategic priority for the bank.

During the three month period the bank’s performing loan book increased, as new lending exceeded redemptions.

Gross loans of €63.6bn were up €0.3bn, however an equal increase in provisions due to IFRS 9 implementation resulted in a flat net loan book of €60bn, the bank said.

New lending drawdowns in the quarter were strong, with lending in Ireland increasing by 18pc in the three months when compared to the prior year period.

In February AIB’s share of mortgage drawdowns was 33pc, as a positive trend in mortgage applications continues.

However in the UK the bank said that new lending was lower in the first quarter of 2018 when compared to the prior year. Overall the bank described its UK loan book as “stable”.

"Q1 delivered a good start to the year with strong profitability, capital generation and continued loan book growth," Bernard Byrne, chief executive of AIB, said.

"The quality of the loan book also improved with increased new lending and further NPE reductions. We continue to focus on meeting our customers' needs, simplifying our operating model and increasing efficiency which positions us well for the remainder of the year."

On the subject of the tracker mortgage scandal, the bank said that 96pc of indetified impacted customers had received payment and the remaining identified customers will be paid in the second quarter.

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