1st May 2019 09:02
LONDON (Alliance News) - Irish lender AIB Group PLC on Wednesday said it has made a "good start" to 2019, remaining on target to meet is 2019 expectations.
Allied Irish Banks said its net interest income was "solid" in the first quarter. The lender's net interest margin edged up in the quarter to 2.50% from 2.48% at the end of 2018. AIB said it "remains comfortable" with its 2019 margin guidance of mid-2.40%s and its medium-term target of higher than 2.40%.
AIB said its performing loan book at the end of March was 1.4% higher than at the end of 2018, rising to EUR57.6 billion. Gross loans were down to EUR62.4 billion, a EUR500 million fall, due to non-performing loan sales.
AIB's new lending increased 11% year-on-year with return on investment mortgage lending up 9%. The lender's mortgage drawdown market share at the end of March stood at 31.4%.
The lender said: "We are experiencing a positive trend in applications data although the impact of our enhanced fixed rates offering has yet to be reflected. In a continuation of credit demand trends witnessed in 2018, corporate and consumer credit remains strong but SME credit demand remains somewhat subdued as firms have delayed making investment decisions due to Brexit related uncertainties."
AIB reduced its non-performing loans a further 21% to EUR4.8 billion in the quarter.
The bank's fully loaded CET1 ratio at the end of the quarter was 17.3%, higher than the 17.5% reported at the end of 2018.
AIB said its operating costs were "marginally up" in the period, in line with expectations, and remains a "key priority" for the bank. AIB attributed wage inflation and continued loan restructuring for the rise.
"We continue to work towards a sub 50% cost income ratio and making the bank as efficient as possible," said AIB.
Regulatory costs and levies for 2019, including to single resolution fund, the deposit guarantee scheme and the bank levy, are expected to be about EUR100 million.
"In this, my first update on the trading performance of AIB, I'm delighted to confirm that we have had a good start to 2019 with solid profitability, strong new lending and continued performing loan book growth," said Chief Executive Colin Hunt.
Hunt added: "Asset quality continued to improve with significant reduction in non-performing exposures putting us firmly on track to reach the milestone of about 5% by end 2019."
Shares in AIB were up 1.0% Wednesday in London at EUR4.18 each.
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