25th Apr 2018 14:04
LONDON (Alliance News) - Allied Irish Banks Group PLC said on Wednesday it has had a good start to 2018 with its profitability and its loan book both growing.
AIB's net interest margin for the three months to March was 2.53%, in line with the prior year, and the figure was 2.50% excluding the income from cured loans.
This, AIB said, reflects lower funding costs offset by the disposal of high yielding bonds and the absorption of fourth quarter mortgage pricing changes.
Gross loans for the period rose by EUR300.0 million to EUR63.6 billion in the quarter, with new lending in Ireland rising 18%. New lending in the UK was lower, however, but its UK loan book has remained stable since December.
AIB's fully-loaded common equity tier 1 ratio at the end of the quarter was 17.1%, down from 17.5% at the end of December, as "strong" profitability was offset by the impact of IFRS 9 accounting changes, a slight increase in risk-weighted assets, and dividend accrual.
Operating costs for the period were in line year-on-year, and the bank continues to invest to generate efficiencies ahead of previously predicted headwinds on costs such as wage inflation, investment in loan restructuring, and increased depreciation.
AIB continues to make progress on its tracker mortgage review, and 96% of customers impacted have now been paid, and the rest will be paid in the second quarter of 2018. The related provisions, it said, remain unchanged.
Overall, AIB said the start of 2018 has been good and it is on track to meet expectations in a favourable economic environment.
Shares were down 1.4% on Wednesday afternoon at EUR5.11 each.
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