AIB today posted a 10% increase in group pre-tax profits for the first six months of the year of €699m, up €64m on the same time last year. The results were better than analyst expectations.
Adjusted earnings per share increased from 60 cent to 64.4 cent, while the bank said it expected strong lending and deposit growth to continue for the rest of the year.
AIB said it has provided €45m against the cost of its investigations into recent overcharging incidents. Another €5m will be taken out of the second half of the year to meet the €50m provision the bank had announced earlier.
AIB's Irish operations saw profit growth of 1% and was impacted by the overcharging investigation charges of €45m. The profit for the division increased by 16% before the charge, the bank said.
Loans increased by 15% since December 2003, including growth of 13% in home mortgages and growth of 15% in other loans. Customer deposits increased by 7% compared with 3% for the same time last year.
Ark Life reported a profit of €24m, down from €26m in H1 2004, reflecting strong growth in the lower margin Personal Retirement Savings Accounts sales.
AIB's operations in the UK and Northern Ireland saw its profits jump by 20% on 2003. Loans and deposits increased by 11% and 12% respectively since December 2003.
The bank's Polish arm reported a profit of €38m, up 30% or 163% in local currency terms, on the same time last year. AIB's share of M&T profit in the US amounted to €95m, for the first six months of the year.
Net interest margins continued to come under pressure in the first half of the year, dropping 34 basis points to 2.46%.
The board has declared an interim dividend of 20.9 cent per share, up 10% on the same time last year.
Last week AIB said it would repay almost €35m to thousands of customers it overcharged.
'The first six months of 2004 was a period of very strong operating performance for AIB,' commented AIB's Group Chief Executive Michael Buckley. 'Very strong lending and deposit growth was achieved and we expect this trend to continue in the second half of 2004,' he added.
AIB shares closed down five at €12.40 in Dublin.
