No plans to sell off impaired AIB owner occupier loans
AIB has reported a full year pre-tax profit of €1.6 billion - before accounting for exceptional items. That is €100m higher than in 2016. The bank has proposed a dividend of €326m, 71% of which will go to the state as the bank's largest shareholder. The volume of impaired loans, those on which borrowers are behind on repayments and where the bank believes it is unlikely to recover the full amount owed, fell by €2.8 billion to €6.3 billion in the year
AIB chief executive Bernard Byrne said the bank has no plans to sell off any impaired owner occupier home loan portfolios. Mr Byrne said the bank's overall ambition to get its level of impaired loans down to more normalised European levels by 2019, does not require it to sell off any loans. It has almost 1,500 employees working in the bank's Financial Solutions Group, which agreed on average over 1,000 such solutions each month last year. Mr Byrne said the bank was not actively looking at any private dwelling home portfolio loan sales. "The issue is not on the active runway," he stated.
On the tracker mortgage issue, Mr Byrne said that more than 95% of its impacted customers have been contacted and compensation agreed. He said the whole programme, subject to review by the Central Bank, will be completed by June, with the majority of cases finalised by the end of this month.
AIB is also making progress on reducing the level of impaired loans on its books and Mr Byrne said it was aided in this by the improved economic environment, higher levels of employment and the fact that people who may be facing arrears now know there is a range of solutions available to them.
In its first set of annual results since the state sold a 29% stake in Europe's largest initial public offering (IPO) last year, AIB proposed dividend payments at 12 cent per share. Mr Byrne said the increase in the bank's dividend was a really important move, adding that the successful completion of the IPO demonstrated strong market sentiment towards AIB and the Irish economy. The next step on that journey is a matter for the Finance Minister, he added.
Mr Byrne also said that due to the red weather alert across the country today, all the banks' branches would remain closed while a skeleton staff would keep the bank's online systems going.
MORNING BRIEFS - Annual results from Ireland's largest company, CRH, show it made a pre-tax profit of €2 billion for the 12 months to the end of December. Revenue was up 2% to €27.6 billion. The building materials giant said it expects to benefit from continued growth in housing and commercial construction in the US and continuing recovery across most European countries.
*** Builders merchant and DIY group Grafton saw its revenue rise by 9% to a record £2.7 billion last year.
Grafton, which which has its headquarters here but is listed on the London Stock Exchange, posted a 35% increase in pre-tax profit to £154.5m.
*** After 57 successive months of expansion in output there are signs of capacity constraint affecting Irish manufacturers. The latest Investec PMI, a monthly report on activity levels and sentiment in the sector, notes a sharp rate of inflation in input prices as the cost of materials including electronic items, paper and steel have risen. The PMI shows continued growth, however. It was at a slightly slower pace than in January but output, new orders and employment in the sector all rose in February.