1st Nov 2023 10:04
(Alliance News) - AIB Group PLC on Wednesday revised its annual guidance upwards, after celebrating a "very strong" third quarter.
In the nine months to September 30, the Dublin-based bank reported an increase in net interest income of 95% compared with the same period a year prior. It attributed this to higher loan volumes, increased interest rates, and a slower-than-anticipated pace of deposit migration and associated interest expense.
Other income increased 10% on the equivalent prior year period, with strong performances across most fee-based lines.
Common Equity Tier 1, or CET1, was 16.2% in September, from 15.7% in June.
Gross loans were up to EUR66.8 billion at September 30, compared to EUR61.2 billion in December. AIB said this was driven by Ulster Bank loan book acquisitions, noting that around EUR4 billion of Ulster Bank tracker mortgages migrated in the third quarter.
Total new lending for the nine months to September was EUR8.5 billion, down 6% from a year prior.
New mortgage lending in Ireland was EUR2.8 billion, down 7% on a comparatively strong period a year earlier, which included a high level of switching activity. Mortgage market share to September was 32%.
Personal lending was up 27% to EUR900 million, which AIB said reflected an enlarged customer base and an increase in consumer credit demand.
"The group had a very strong third quarter performance continuing the momentum from the first half and we expect that to continue in the final quarter. Notwithstanding geopolitical uncertainty, AIB remains in a position of strength," said Chief Executive Officer Colin Hunt.
Subsequently, AIB upped its guidance for the full year.
It now expects a return on tangible equity of over 20%, with net interest income over EUR3.75 billion.
Other income is expected to be around EUR850 million, while costs are set at around EUR1.8 billion. Customer loans are expected to grow by 10%.
AIB Group shares were trading 2.6% higher at 364.00 pence each in London on Wednesday morning.
By Holly Beveridge, Alliance News reporter
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