27th Jul 2018 10:24
LONDON (Alliance News) - AIB Group PLC on Friday said its operating profit declined in the first half of 2018, as it continues to reduce its non-performing loan portfolio.
Allied Irish Banks reported pretax profit of EUR762 million for the six months to June 30, improving slightly from EUR761 million in the same period the prior year.
Operating profit declined 5% to EUR776 million from EUR823 million, including writebacks of provisions but excluding business sales.
Total operating income fell 10% to EUR1.38 billion from EUR1.53 billion year-on-year. Within this, net interest income dropped 1.5% to EUR1.06 billion from EUR1.08 billion, as the lender's net interest margin worsen to 2.50% from 2.54%.
Allied Irish Banks ended the half-year with EUR59.9 billion in performing loans, up EUR2.2 billion over the six month period. Non-performing loans decreased to EUR7.5 billion from EUR10.2 billion.
The lender reported a return on tangible equity of 15.2% for the half, down from 14.4% the prior year. Allied Irish Banks noted this was due to lower average risk weighted assets, and said it continues to target a return on tangible equity of above 10%.
The bank's fully-loaded Common Equity Tier 1 ratio, a key measure of financial strength, stood at 17.6% at the end of the half, rising marginally from 17.5% at the end of 2017.
"We have had a positive six months with solid underlying profitability," said Chief Executive Bernard Byrne. "The strong Irish economy continues to provide good growth opportunities for our customers and our business."
Shares in AIB Group were trading 0.3% higher on Friday at EUR4.92 each.
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