Shares in AIB slumped over 7% in Dublin today after the bank announced pre-tax profits of just over €1.01 billion for the year ended December 2003. The figure was some €300m down on the previous year but was in line with expectations.
The bank reported a 3% rise in underlying earnings per share and said it expected this year's business volumes to be buoyant.
AIB - with operations in Ireland, the UK, the US and Poland - said that EPS was a more relevant base for year-on-year comparison due to previous merger costs and share buybacks.
AIB's Irish business was up 14%, with home mortgages up 34% and other loans up 25%. Customer deposits increased by 9% with strong growth reported in the second half of the year.
Profits at Ark Life were up 6% to €60m, reflecting strong growth in income from protection products and a much improved performance in the second half of the year.
AIB's UK and Northern Ireland businesses saw profits increase by 15%. Loans and deposits were up 25% and 15% respectively. It said that future business development capacity continues to be enhanced with seven business development offices opened during the year.
Underlying profit (before taxation) at AIB's Capital Markets division increased by 12%, which it said was a strong performance in challenging market conditions. Profits at Corporate Banking were up 15% on the previous year while Global Treasury also increased its profit contribution.
In Asset Management, AIB said the net loss after the sale of Govett to Gartmore Investment Managers during the year was mainly related to the write-off of goodwill on disposal. Allied Irish America's profit was higher, reflecting a good trading performance despite lower revenue from charitable fund raising activities.
Profits at AIB's Polish operations were down 17% in local currency terms. During the year staff numbers were reduced by 1,700, the cost benefits of which will be seen in 2004's figures. 'The building of our Polish franchise is fundamentally complete, and we are well positioned to take advantage of the emerging growth trends that are now evident in the Polish economy,' AIB said.
'2003 was a year of record business volumes, transition in the USA and restructuring initiatives,' commented AIB Group CEO Michael Buckley.
'Our confidence in future earnings prospects is shown by the Board's decision to recommend a total dividend increase of 10% on the 2002 level,' he said.
'Business performance so far in 2004 is strong with another buoyant year for business volumes expected. Though the net impact of translating foreign currency earnings will still be a negative factor, we expect to benefit from a significant turnaround in Polish profits and double digit earnings growth in M&T,' he added.
* AIB shares had slumped almost 7% to €12.35 in Dublin this afternoon - a fall of 95 cent.
