Shares in AIB fall 8pc after CEO announces plan to step down
Shares in AIB are trading down over 8pc this morning after CEO Bernard Byrne announced that he is to step down.
The drop in share price has wiped approximately €1bn off the value of AIB.
Mr Byrne has led the bank since 2015, having previously held a number of senior executive positions, including chief financial officer and director of personal, business and corporate banking.
His departure is likely to revive concerns raised by AIB's management about the pay cap on bank salaries, after it warned in 2017 that it risked losing employees to international banks.
In response to Mr Bryne's decision to step down, AIB chairman, Richard Pym, said:
"It was a very grim day in my life when Bernard told me that he had an external opportunity which he wanted to pursue. The fact that it came so soon after the resignation of our CFO, Mark Bourke, made it doubly difficult."
With Mr Pym adding that Mr Byrne had been a "great business partner to me and a good friend."
Mr Byrne will remain as CEO of AIB into 2019.
The bank also today announced that it continued to perform well in the third quarter, and is on track to deliver a full year financial performance in line with market expectations.
Net interest income – a key measure of a bank’s performance - was stable in the nine months to September 2018 compared to the equivalent prior year period, according to a trading update from the bank.
Net loans increased €0.5bn from December 2017 to €60.5bn, which the bank said reflected strong growth in new lending.
AIB said that its small and medium business is trading well, despite what it described as a "weaker market backdrop".
The bank said its mortgage lending in Ireland so far this year is "strong" with drawdowns up 13pc on the prior year period.
AIB had a market share of mortgage drawdowns of 32pc in August.
The bank added that new lending in the UK remains stable and reflects its current cautious risk appetite given the Brexit backdrop.
Non-performing loans at the bank now represent 11pc of gross loans, down from 16pc at December, having reduced to €7.2bn at September 2018 from €10.2bn at December 2017.
"Following a positive financial performance in H1, we continue to deliver strong profitability, generate capital and increase new lending," Mr Byrne said.