PROPERTY LOAN LOSSES HIT AIB FIGURES - AIB has reported a total loss for the group of €10.2 billion, compared with a loss of €2.3 billion in 2009. Contained in that loss is €7 billion on loans transferred to NAMA.
Costs have to be lowered, and staff numbers will be reduced by 2,000 over this year and next, as expected.
AIB executive chairman David Hodgkinson said the losses were mainly due to poor quality loans, mainly in the property sector. He said outflows of deposits from the bank had stabilised after news of the Government's restructuring plans.
Mr Hodgkinson said there had been a kind of 'collective madness' on property. He said most of the bank's loan problems were based in the Republic of Ireland, including investment properties and companies and individuals who invested in property. Mr Hodgkinson said the bank wanted to engage with customers in difficulty and work with them.
He said the 2,000 job cuts would be spread across the organisation, and the vast majority of lay-offs would be voluntary.
Mr Hodgkinson said the bank's search for a new chief executive was progressing well, but it was 'cranking up' the process only now after the results of the stress tests.
The AIB chairman said the bank would aim to be 'fair' in how it implemented changes in interest rates on deposits and loans. Mr Hodgkinson said higher unemployment would present a challenge to mortgage holders, but he hoped that the number in arrears would stop growing.
On the Irish economy, he said it had some 'powerful' advantages, and he was positive about its long-term potential, but a return of confidence was needed.
