AIB SAYS ON TRACK TO RETURN TO PROFITABILITY BY 2014 - AIB said its after tax losses for the year to the end of December fell from over €10 billion to €2.3 billion. The bank also said its operating losses came to €5.1 billion - compared to €12.1 billion last year. Deposits are up but so are mortgage arrears. The bank now has €1.7 billion in mortgages classified as impaired. Last year that impairment figure was €470m. Despite the significant headwinds, chief executive David Duffy says in the results statement that AIB is still on track to return to profitability in 2014.
David Duffy says the bank will start moving back into the back as the economy starts to improve - which will drive increased business volumes - as the level of arrears start to level off and as the bank begins to see the results of its aggressive cost cutting programme. Mr Duffy says that talks with unions about the 2,500 redundancies at the banks are continuing and the bank will move ahead with the programme in the next few weeks.
On arrears, the AIB CEO says levels will continue to climb this year, before levelling off and eventually starting to fall. He says the bank wants to keep people in their homes where ever possible, adding that AIB has introduced a wide range of initiatives on this issue. He says that most people in arrears do not want blanket debt forgiveness as it has long-term repercussions. Mr Duffy says that trackers continue to have a dragging effect on the bank, but he said he was not yet able to confirm what eventual solutions the bank will come up with. Defending the move to impose a minimum daily balance of €2,500 on current account holders, Mr Duffy said that the bank's mandate is to create sustainable profits and in order to attract investors, all parts of the bank have to become economically viable.
MORNING BRIEFS - Aer Lingus chief executive Christoph Mueller took home a total pay packet of €1.2m last year - up just over €100,000 thanks to a €611,000 performance bonus. That is on top of a basic salary of €475,000 and a pension contribution from the company of €119,000. The airline did see its revenues and profits climb last year.
*** A new super lobby group of retailers called the National Retail Industry Alliance, representing some 17,000 shops and over 200,000 employees, has come together. Its initial campaigning point is a stated belief that the budget should be moved from December to February or November. The rationale behind the suggestion is that February and November are traditionally much quieter months for retailers. The shop owners fear that having the budget in December, particularly when we are talking about takeaway rather than giveaway budgets, is depressing spending. The NRIA puts a figure of 7% on the decline in sales due to the timing of the budget. It says this represents a threat to jobs and also a lost opportunity for the state to raise much needed VAT receipts.
*** Asian markets are heading for the best quarter in 20 years. That is despite a drop in US markets as a result of disappointing unemployment benefit claimant numbers.
