Final Results
November 26 2003 - 2:00AM
UK Regulatory
RNS Number:4847S
Anglo Irish Bank Corp PLC
26 November 2003
ANGLO IRISH BANK
Preliminary Results for the Year to 30 September 2003
H I G H L I G H T S
Anglo Irish Bank today (Wednesday 26 November 2003) published its preliminary
statement for the year to 30 September 2003.
* Pre-tax profits increased by 33% to Euro346.5 million (2002: Euro261.3
million)
* Basic earnings per share rose by 34% to 78.03 cent (2002: 58.14 cent)
* Total assets increased by 31% to Euro25.5 billion (2002: Euro19.4 billion)
* Lending to customers increased by 34% on a constant currency basis to
Euro18.1 billion
* Tier One Capital stands at 8.5%
* Final dividend proposed of 13.93 cent bringing total dividend for the
year to 18.80 cent, an increase of 50% on 2002
Commenting on the results, Sean FitzPatrick, Group Chief Executive, said:
"These exceptional results were accomplished against the backdrop of moderate
economic growth in our key markets.
Loans to customers increased by Euro4.6 billion net on a constant currency basis,
the strongest growth in the history of the Group. Asset quality remains robust
and given the quality and our expectations concerning potential losses arising,
we feel it is unlikely we will need to make a general provision charge in the
next few years. We will of course keep this under review.
Given the strength and consistency of the Group's performance together with our
confidence for the future, the Board is recommending a 50% increase in total
dividend. This establishes a higher base on which to continue our progressive
dividend policy in the future.
The performance so far in the current year is very encouraging. Work in
progress is at record levels and I look forward to a strong outcome for the year
to September 2004"
-ends-
For reference:
Sean FitzPatrick, Group Chief Executive Trish Morrissey/Orla Benson
Willie McAteer, Group Finance Director Drury Communications
Matt Moran, Associate Director, Group Finance Tel: (01) 260 5000
Anglo Irish Bank - Tel: (01) 616 2000
Chairman's Statement
2003 was the Bank's strongest year to date. Pre-tax profits increased by 33% to
Euro346.5m following record earnings in 2002. These results were achieved against
the backdrop of moderate economic growth in our key markets. The performance
underscores the strength of our focused business model. Financial highlights
for the year include:
* Pre-tax profits increased by 33% to Euro346.5m
* Basic EPS rose by 34% to 78.03 cent
* Dividends increased by 50% to 18.80 cent per share
* Lending grew by 34% on a constant currency basis
* Non inter-bank funding increased by 47% on a constant currency basis
* Cost/income ratio: 29.3%
* Return on equity: 31%
* Tier One Capital: 8.5%
Our results in 2003 bring the five-year compound annual growth rate in earnings
per share to 41% and extend to 18 years the Bank's record of uninterrupted
profit growth.
Dividends
In recognition of our performance over recent years, our capital position and
our confidence for the future, the Board is on this occasion recommending the
establishment of a higher base from which to continue our progressive dividend
policy. Accordingly, the Board recommends a final dividend of 13.93 cent per
share, an increase of 67%. This brings total dividends for the year to 18.80
cent per share, an increase of 50% over 2002. Our dividend cover remains
strong at 4.2 times.
It is proposed that the final dividend be paid on 30 January 2004 to
shareholders on the Bank's register as at the close of business on 5 December
2003. Withholding tax may apply on the dividend, depending on the tax status of
each shareholder. Shareholders will again be offered the option of receiving
dividends in the form of cash or shares.
Operations
Business Lending
The Bank's earnings continue to be driven by its lending activities which
account for nearly 80% of total profits. We have continued to make very strong
inroads into our target sectors and these have delivered a record Euro4.6Bn of net
new business in the year. This clearly reflects the strength of our franchise
across our markets.
Loan balances in both of our core lending markets - Ireland and the UK - grew by
in excess of 30%. Boston continues to perform very strongly, albeit from a much
smaller base. Total group lending now exceeds Euro18Bn, an increase of 34% over
2002 on a constant currency basis. Margins continue to be strong and asset
quality, the cornerstone of year on year quality profit growth, remains robust.
Treasury & Wealth Management
The record growth in lending was complemented by a significant increase in
funding - the primary objective of our Treasury Division. Excluding the impact
of currency movements, non inter-bank sources grew by Euro6.1Bn, an increase of
some 47% over 2002. We continue to diversify our funding, thereby enhancing
overall quality.
Furthermore, the fees generated by our Treasury and Wealth Management divisions
provide a valuable and substantial source of income to the Bank. Treasury has
developed a successful, targeted and growing franchise in each market in which
it operates. Similarly, the positioning of our Wealth Management division with
operations in Dublin, Geneva, UK, Vienna, and Isle of Man, was further
strengthened during the year with the acquisition of Ernst & Young Trust Company
Limited. This enables it to take advantage of an improving economic environment
and strengthening equity markets. Both divisions performed strongly in 2003,
accounting for some 20% of total Group profits.
Our cost/income ratio remains below 30% - Euro70 of every Euro100 of incremental
revenues accrues to profit before bad debt provisions. This demonstrates the
inherent strength of our business model which continues to generate significant
operational leverage and delivers superior returns.
People
At the heart of our performance over the years has been the skill,
professionalism and dedication of all our people. They have been the single
most important ingredient in our success. 2003 is no exception and I thank them
on behalf of all stakeholders.
As a Board we recognise the strength of the Bank's culture which is reinforced
by the fact that a very high proportion of employees are also shareholders who
participate in the Bank's success. Their interests are aligned with those of
their fellow shareholders and our customers are well served.
In September 2003, Ronan Murphy retired as Group Secretary, a position he held
since 1986 having joined the Bank in 1972. The Directors are immensely grateful
to Ronan for his commitment to the Board and the real contribution he made to
the Bank. Bernard Daly has been appointed as Ronan's replacement.
As I reported to you in my interim statement, Patricia Jamal was appointed to
your Board as a Non-Executive Director in January 2003. Patricia was a former
Senior Executive at Barclays Bank plc and we welcome her to the Board.
Performance
A key metric applied by the Board in assessing performance is total shareholder
return (TSR). Our TSR (growth in share value assuming reinvestment of gross
dividends) over the past five-year period is 440%. Against any benchmark, Anglo
Irish Bank has significantly outperformed its peers. For example, the
comparative cumulative five-year performance for the FTSE 350 Banks index was
69%, while the S&P 500 Banks index returned 35%.
Strategy
Implementing our strategy has enabled the Bank to consistently deliver market
leading profit growth throughout the past 18 years. We firmly believe that the
Bank's significant core advantages distinguish us in the market place and
position us for continued success.
A key element of our strategy remains our very clear focus. We operate in
sectors and markets where our structure enables us to provide a tailored,
differentiated service. We will continue to generate strong lending growth -
both in terms of volume and asset quality. Income diversification will be
achieved through our growing Treasury and Wealth Management operations. Most
importantly, the Bank's growth will be delivered with full regard for all issues
concerning risk. The successful international application of our business model
is now well recognised.
Our strategy and objectives are based on organic growth. We will continue to
look at acquisition opportunities as they arise but will only proceed with those
which match our long-term strategic objectives and meet the stringent criteria
we impose.
Outlook
We are confident of your Bank's future prospects. It is our belief that the
implementation of our strategy will enable us to achieve strong, high quality
growth across each of our operations and that we will continue to significantly
outperform the market.
Your Bank begins its new year from a position of unprecedented strength.
Lending work in progress is in excess of Euro3Bn, the highest level in the Bank's
history. Both our Treasury and Wealth Management businesses have developed
strong franchises delivering an important contribution to our profits. The
proposed step up in dividend is a real and tangible reflection of this strength
and our belief in the future.
Your Bank has achieved a considerable amount in a relatively short period. It
is well placed to take advantage of the opportunities that continue to arise in
each of its markets and your Board is confident that these opportunities will
translate into real value for shareholders.
Peter Murray
Chairman
25 November 2003
ANGLO IRISH BANK CORPORATION plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the Year Ended 30 September 2003
2003 2002
Eurom Eurom
Interest Receivable and Similar Income
Interest Receivable and Similar Income arising from
Debt Securities and other Fixed Income Securities 40.7 47.1
Other Interest Receivable and Similar Income 1,019.9 943.0
Interest Payable and Similar Charges (646.6) (643.2)
Net Interest Income 414.0 346.9
Other Income
Fees and Commissions Receivable 152.3 123.3
Fees and Commissions Payable (12.7) (11.6)
Dealing Profits 6.4 3.5
Other Operating Income 11.2 9.4
Total Operating Income 571.2 471.5
Operating Expenses
Administrative Expenses 155.0 132.9
Depreciation and Goodwill Amortisation 12.2 11.7
Provisions for Bad and Doubtful Debts - Specific 10.1 16.3
- General 47.4 49.3
224.7 210.2
Group Profit on Ordinary Activities Before Taxation 346.5 261.3
Taxation on Profit on Ordinary Activities (76.4) (58.5)
Group Profit on Ordinary Activities After Taxation 270.1 202.8
Minority Interests (16.8) (18.8)
Group Profit Attributable to Ordinary Shareholders 253.3 184.0
Dividends (61.6) (40.3)
Group Profit Retained for Year 191.7 143.7
Scrip Dividends 8.6 8.4
Group Profit Brought Forward 455.7 303.6
Group Profit Carried Forward 656.0 455.7
Basic Earnings Per Share 78.03 c 58.14 c
Diluted Earnings Per Share 76.24 c 56.71 c
Dividends Per Ordinary Share 18.80 c 12.53 c
ANGLO IRISH BANK CORPORATION plc
CONSOLIDATED BALANCE SHEET
As at 30 September 2003
2003 2002
Eurom Eurom
Assets
Loans and Advances to Banks 5,798.8 3,887.8
Loans and Advances to Customers 17,268.5 13,356.5
Securitised Assets 808.0 940.4
Less: Non-Returnable Proceeds (777.1) (903.4)
30.9 37.0
Debt Securities 1,365.2 1,456.4
Equity Shares 4.5 2.4
Own Shares 6.2 6.1
Intangible Fixed Assets - Goodwill 73.8 61.5
Tangible Fixed Assets 32.9 28.0
Other Assets 417.0 269.1
Prepayments and Accrued Income 256.8 233.8
25,254.6 19,338.6
Life Assurance Assets Attributable to Policyholders 271.7 79.2
Total Assets 25,526.3 19,417.8
Liabilities
Deposits by Banks 3,290.1 3,097.4
Customer Accounts 14,577.6 11,836.1
Debt Securities in Issue 4,557.9 1,919.2
Proposed Dividends 45.8 26.9
Other Liabilities 259.8 206.7
Accruals and Deferred Income 267.1 226.6
Provisions for Liabilities and Charges 4.8 4.9
23,003.1 17,317.8
Capital Resources
Subordinated Liabilities 429.0 467.3
Perpetual Capital Securities 645.0 564.7
Equity and Non-Equity Minority Interests 260.1 279.2
1,334.1 1,311.2
Called Up Share Capital 105.8 104.1
Share Premium Account 154.7 148.9
Other Reserves 0.9 0.9
Profit and Loss Account 656.0 455.7
Total Shareholders' Funds (All Equity Interests) 917.4 709.6
Total Capital Resources 2,251.5 2,020.8
25,254.6 19,338.6
Life Assurance Liabilities Attributable to Policyholders 271.7 79.2
Total Liabilities and Capital Resources 25,526.3 19,417.8
Memorandum Items
Contingent Liabilities
Guarantees 764.6 655.5
Commitments
Commitments to Lend 3,037.0 2,530.8
ANGLO IRISH BANK CORPORATION plc
CONSOLIDATED CASH FLOW STATEMENT
For the Year Ended 30 September 2003
2003 2002
Reconciliation of Operating Profit To Eurom Eurom
Net Operating Cash Flows
Operating Profit 346.5 261.3
Increase in Accruals and Deferred Income 37.9 158.0
Increase in Prepayments and Accrued Income (24.0) (117.1)
Financing Costs of Subordinated Liabilities 29.1 33.6
Financing Costs of Perpetual Capital Securities 47.4 31.4
Interest Earned on Debt Securities and other Fixed Income Securities (39.2) (41.0)
Amortisation of Debt Securities and other Fixed Income Securities (1.5) (6.1)
Provisions for Bad and Doubtful Debts 57.5 65.6
Loans and Advances Written Off Net of Recoveries (17.9) (19.4)
Depreciation and Goodwill Amortisation 12.2 11.7
Profit on Disposal of Tangible Fixed Assets - (0.1)
Net Cash Flow from Trading Activities 448.0 377.9
Net Increase in Deposits 5,572.9 3,009.2
Net Increase in Loans and Advances to Customers (3,945.5) (2,464.4)
Net Increase in Loans and Advances to Banks (693.4) (917.8)
Net Increase in Other Assets (146.6) (60.1)
Net Increase in Other Liabilities 43.4 3.5
Net (Decrease)/Increase in Provisions for Liabilities and Charges (0.1) 0.1
Exchange and Other Movements (99.7) (27.6)
Net Cash Flow from Operating Activities 1,179.0 (79.2)
Returns on Investment and Servicing of Finance (49.9) (44.1)
Tax Paid (80.1) (72.3)
Capital Expenditure and Financial Investment 77.4 (516.0)
Acquisitions and Disposals (15.4) -
Equity Dividends Paid (34.1) (25.8)
Financing 140.2 320.7
Increase/(Decrease) in Cash 1,217.1 (416.7)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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