TIDMALBK
RNS Number : 2260M
Allied Irish Banks PLC
27 July 2017
Embargo 07:00 27 July 2017
Allied Irish Banks, p.l.c. ("AIB") announces half year pre-tax
profits of EUR0.8bn
CEO Comment
Commenting on the results Bernard Byrne, CEO said:
'The successful relisting of the Company on the Dublin and
London Stock Exchanges, supported by a strong underlying financial
performance and the reinstatement of an ordinary dividend were the
highlights from a very positive first half.'
H1 2017 financial highlights
-- EUR0.8bn profit before tax, driven by strong sustainable
business performance with higher income and lower one-off credits.
(H1 2016 benefitted from EUR272m profit on disposal of Visa
Europe)
-- 48bps increase in net interest margin (NIM) to 2.54% from
2.06% in H1 2016; NIM 2.47% excluding cured loan interest(1) .
Continued positive margin trajectory with the spread widening
between yields on assets and liabilities and redemption of legacy
instruments
-- Cost income ratio (CIR) of 45%(2) ; 51% excluding income from
cured loans / restructuring-related items. Operating expenses(2)
increased by 2% in line with expectations to EUR0.7bn
-- The EUR870m 3-year strategic investment programme, which will
complete at the end of 2017, is delivering additional efficiencies
and productivity enhancements, capacity for growth and improved
customer satisfaction
-- EUR7bn of new lending approvals to customers; EUR4.3bn of new
term lending drawdowns; 15% increase year on year with strong new
lending growth in mortgages of 41% in Ireland
-- Impaired loans reduced to EUR7.8bn, down c. EUR1.3bn since
December 2016 and c. EUR21bn since December 2013 and non-performing
loan exposures (NPEs(3) ) further reduced by EUR2bn to
EUR12.1bn
-- Robust capital generation of 130bps since December 2016.
Strong capital position with Transitional common equity tier 1 (CET
1) ratio of 19.9% and fully loaded CET 1 ratio of 16.6% well in
excess of the 2017 SREP transitional CET 1 requirement of 9%
-- Total of c. EUR10.2bn returned to the State including the
proceeds from the recent IPO and EUR250m ordinary dividend
payment
(1.) (Additional income recognised on loans upgraded from
impaired without financial loss)
(2. Excluding exceptional items, levies and regulatory fees)
(3.) Non-performing exposures (NPEs) exclude EUR0.3bn of
off-balance sheet commitments, as per EBA definition
Sustainable underlying operating performance continues in H1
2017
-- Pre-provision operating profit(2) of EUR0.8bn (H1 2016:
EUR0.6bn); consistent sustainable underlying profitability
-- Total operating income of EUR1.5bn (H1 2016: EUR1.2bn); net
interest income increased by 14% and higher other income mainly due
to higher income from the realisation/re-estimation of cashflows
for previously restructured loans
-- Positive NIM trajectory to 2.54% in H1 2017, up 48bps from
2.06% (H1 2016) due to lower funding costs, stable asset yields and
the redemption of legacy instruments. NIM of 2.47% excluding cured
loan interest
-- Higher other income of EUR452m in H1 2017 reflects stable net
fee and commission of EUR195m and also includes profit from AFS and
gains related to the realisation/re-estimation of cashflows for
previously restructured loans
-- Cost income ratio of 45%; benefiting from higher one-off
income offset by higher other costs while staff costs remained
broadly in line with half year to June 2016. CIR of 51% excluding
income from cured loans / restructuring-related items
-- Bank levies and regulatory fees of EUR45m (H1 2016: EUR48m)
mainly reflects payments to the Deposit Guarantee Scheme and Single
Resolution Fund
-- Net credit provision writebacks of EUR19m (H1 2017: EUR211m)
due to continued progress in case-by-case restructuring of impaired
loans in an improved economic environment and a new to impaired
charge in line with expectations
Strengthened balance sheet and capital accretive
-- Net loans at c. EUR60bn and an increase in earning loans of
EUR0.5bn (excluding fx impact) due to growth in quality new term
lending and progress on customer restructuring partially offset by
repayments and asset sales
-- Customer accounts increased to c. EUR64bn resulting in a loan
to deposit ratio of 94% (Dec 16: 95%). The mix profile of customer
accounts continued to change in H1 2017 with c. EUR1.7bn increase
in current accounts offset by a reduction of EUR1.5bn in Corporate
and Treasury deposits
-- NAMA senior bonds at EUR0.4bn, a reduction of EUR1.4bn since December 2016
-- The net stable funding ratio was 122% and liquidity coverage
ratio was 134% at end of June 2017
-- Robust capital generation and strong ratios - Transitional
CET 1 capital ratio of 19.9% and a fully loaded CET 1 ratio of
16.6% at 30 June 2017 mainly due to profit generation and a
reduction in risk weighted assets
-- Strong leverage ratio of 10.4% up from 9.2% at December 2016
transforming customer experience and supporting economic
growth
-- Multi-brand mortgage offering and compelling customer propositions delivering growth
-- Strong market position in mortgages with 37% share of new lending drawdowns ytd May 2017
-- Maintaining strong market shares across personal products and key business lines
-- New term lending drawdowns of EUR4.3bn, up 15% year on year;
increased new lending in key portfolios in retail Ireland including
a 41% increase in mortgage lending and 19% increase in other
lending including business lending across a broad range of
sectors
-- Ongoing strategic investment in customer proposition and
market-leading digital distribution with EUR705m of the 3 year
EUR870m strategic investment programme utilised to deliver IT
resilience, agility and a simple and efficient operating model
focused on improving the customer experience. The investment
programme is delivering tangible outcomes:
o Over 1.2 million active online users, 700,000 mobile users
with customers interacting on mobile at least once per day
o 69% of transactional customers active on digital channels
o 77% of personal loans now applied for via mobile or online
o Net Promoter Scores in Q2 2017
-- Personal Relationship NPS +21
-- Transactional NPS +38
Details of AIB's 2017 half year financial performance, including
all relevant disclosures and notes to financial statements, can be
found on AIB's website aib.ie/investorrelations
-ENDS-
For further information, please contact:
Mark Bourke Rose O'Donovan/Niamh Hore Orla Bird / Paddy McDonnell
Chief Financial Officer Investor Relations Corporate Affairs
AIB Bankcentre AIB Bankcentre AIB Bankcentre
Dublin Dublin Dublin
Tel: +353-1-6412195 Tel: +353-1-6414191 Tel: +353-1-6415375
email: email: email:
mark.g.bourke@aib.ie rose.m.o'donovan@aib.ie orla.c.bird@aib.ie
niamh.a.hore@aib.ie paddy.x.mcdonnell@aib.ie
Important Information and forward-looking statements
This document contains certain forward-looking statements with
respect to the financial condition, results of operations and
business of AIB Group and certain of the plans and objectives of
the Group. These forward-looking statements can be identified by
the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as
'aim', 'anticipate', 'target', ' expect', 'estimate', 'intend',
'plan', 'goal', 'believe', 'may', 'could', 'will', 'seek',
'continue', 'should', 'assume', or other words of similar meaning.
Examples of forward-looking statements include, among others,
statements regarding the Group's future financial position, capital
structure, Government shareholding in the Group, income growth,
loan losses, business strategy, projected costs, capital ratios,
estimates of capital expenditures, and plans and objectives for
future operations. Because such statements are inherently subject
to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking
information. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These are set out in the 'Principal risks and
uncertainties' on pages 50 to 58 of the Annual Financial Report
2016 and on page 34 'Update on risk management and governance' of
the Half-Yearly Financial Report 2017. In addition to matters
relating to the Group's business, future performance will be
impacted by Irish, UK and wider European and global economic and
financial market considerations. Any forward-looking statements
made by or on behalf of the Group speak only as of the date they
are made. The Group cautions that the list of important factors on
pages 50 to 58 of the Annual Financial Report 2016 and on page 34
of the Half-Yearly Financial Report 2017 is not exhaustive.
Investors and others should carefully consider the foregoing
factors and other uncertainties and events when making an
investment decision based on any forward-looking statement
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUACMUPMUUM
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