AIB insists "no plans" to sell off distressed private home mortgages

The bank this morning announced pre-tax profits of €1.6bn for 2017

AIB insists it has no plans to sell on any mortgages held by private homeowners.

The bank this morning announced pre-tax profits of €1.6bn for 2017 - a rise of €100m on the previous year.

It is currently in the process of selling a €3.7bn bundle of commercial and buy-to-let loans, with some major global funds believed to be interested.

On Newstalk Breakfast this morning, the bank's CEO Bernard Byrne admitted it is under pressure to normalise the level of distressed loans on its books.

He insisted however that there are no plans to sell any Private Dwelling Home loans:

“What we can say is that our target for normalisation does not require us to sell a Private Dwelling Home (PDH) portfolio,” he said. “We have no plans to sell a PDH portfolio.”

“All I can tell you is in terms of our plan and our process for the next couple of years – so that is where we are at – we don’t have any active plan to sell a PDH portfolio.

“We have none in the market and we are not looking at it.”

He said the “number one way” the bank deals with its non-performing loans is by working with customers on a case-by-case basis- with the bank dealing with an average of over 100 restructurings every month.

The bank’s financial results for 2017 reflect the success of the flotation of nearly 30% of it s shareholding on the Dublin and London stock-markets.

It reported growth in lending across most sectors and in the UK as well as Ireland.

The pre-tax profits of €1.6bn surpassed the expectations set for its investors at the time of flotation.

Mr Byrne said it has been a positive year for the bank – with investors rewarded with a 30% hike in dividend payments to 12c per share:

“The key number of us really is the amount of capital we generated which was 280 basis points of capital in the year, which allowed us to pay that incremental dividend or declare the incremental dividend of €326m – an increase of 30%.” he said.

“The economy is doing well, which is obviously a key underpinning for everything we do.

“The cost of funding is continuing to stay low and our overall cost base is beginning to take shape.”

He said the dividend payment is likely to increase again next year as the bank’s capital reserves continue to grow.