This week proved to be a particularly busy one on the financial results front, with a raft of Irish, European and US companies releasing data on their quarterly and half-yearly performances.
Here, the three main domestic banks all issued financial results on consecutive days.
Permanent TSB set the ball rolling on Wednesday, announcing a return to post-tax profit for the first time since before the financial crisis.
AIB followed on Thursday, while Bank of Ireland was the last to post its H1 numbers on Friday.
Permanent TSB
The key data:
- Post-tax profit of €80m for H1 – the first since 2007
- This compared with a loss of €400m for the same period in 2015
- Profit of €117m before tax and exceptional items – a significant rise from the €1m recorded from H1 last year
- Impairment write back of €61m
- Net interest margin rose by 31 basis points to 1.43%
- New mortgage lending rose 4% year-on-year
- Non-performing loans reduced by €400m in December 2015 to €6.2bn
What the CEO said:
PTSB Group Chief Executive Jeremy Masding said: "Having recapitalised the bank during 2015, the Group has moved to pre-and post-tax profitability and is generating capital for the first time since 2007.
"This, I believe, positions us better to focus on our commercial agenda and to grow the business.
"Of course there are challenges ahead. However, we remain as committed as ever to serving our customers and, to delivering attractive and sustainable returns to our shareholders by making the most of our key strengths."
What the analysts said:
Cantor Fitzgerald: "Overall, a very positive set of results with a return to profitability.
"The bank remains at depressed valuation levels, trading at just 0.4x 2016 P/B.
"We maintain our €2.66 target price for now and expect the share price to rally in the near term on the back of this set of results."
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AIB
The key data:
- Pre-tax profits of €1 billion for H1 (includes one-off exceptional benefit from sale of stake in Visa Europe)
- Made back €211m that it had previously written down on expected bad loans
- Impaired loans reduced to €11.3 billion - down €1.8 billion since December and €18 billion from the peak in late 2013
- €1.8 billion repayment to State for loan notes issued as part of bank bailout
- Announced measures to reinstate customers on tracker mortgages who had them improperly taken from them
- Operating expenses increased by 5% H1 to €677m
- 16-basis-point rise in net interest margin to 2.08%
- 8% rise in new lending to €6.1 billion
What the CEO said:
AIB CEO Bernard Byrne said the results show AIB "is now a customer-focused, sustainable and well-capitalised business that is in a growth phase.
"These results reflect the underlying strength of the financial performance of AIB and our robust capital position which allows us to continue to support the economies in which we operate and to facilitate the further payment of €1.8 billion to the State.
"We are a customer focused digitally enabled bank and our financial performance, strong franchise and leading market propositions, position us well for future challenges and opportunities."
What the analysts said:
Merrion Stockbrokers: "Another strong result from AIB as lending increases, margins rise and capital builds.
"The result continued to highlight AIB’s: strong and improving profitability, a key stakeholder in Irish business, consumer & mortgage lending, improving solvency and a further return in capital to the Irish government.
"H1 2016 result further emphasises that AIB is ready for IPO."
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Bank of Ireland
The key data:
- Pre-tax profit of €557m, down from €725m for H1 2015
- Net profit fell 30% to €439m, however, this figure was ahead of analysts' expectations
- Non-performing loans fell further by €2.1 billion
- Defaulted loans around 10% of customer loans – less than half of their reported peak in June 2013
- New lending rose 14% to €6.9 billion
- Net impairment charge was €95m, representing a reduction of 21 basis points
What the CEO said:
Bank of Ireland Chief Executive Richie Boucher said all its trading divisions are now profitable.
He noted its non-performing loans and the charge it takes for impairments – amounts the bank feels it is unlikely to recover from borrowers – has fallen further by €2.1 billion.
Mr Boucher said it was too early to fully assess the impacts, but “the strength of our business model gives us confidence in the Group’s prospects”.
Mr Boucher said the bank’s business “continued to perform in line with the strategic objectives we have set ourselves”.
What the analysts said:
Davy Research assessment: "Underlying PBT was 5% ahead of expectations as lower impairment charges and higher other income offset higher expenses and lower net interest income.
"Other notable features include a 14% increase in new lending together with a strong restructuring performance, with NPLs reducing by a further €2.1bn.
While reiterating that it still aims to recommence dividend payments, given the uncertainties relating to Brexit, the bank has understandably acknowledged that the timing of the recommencement may be delayed."
