The bank has issued a quarterly trading update ahead of its AGM today...
AIB has reported that its performance during the first quarter of 2017 was in line with expectations.
The bank saw a 10% year-on-year increase in new loan drawdowns, a four basis point increase in net interest margin to 2.46% and a further reduction of €500m in impaired loans during the first three months of the year.
Strong profitability, a stronger balance sheet, significantly capital generation and improvement in its risk profile were some highlights from its trading statement.
AIB's impaired loans stood at €8.6 billion at the end of March, representing a 70% reduction from the peak level of €29bn.
It recently sold a large bundle of non-performing buy-to-let property loans to Goldman Sachs. The €200m deal represented a 50% discount on the original loan value of the 'Project Cypress' portfolio. It contains around 1,500 loans, with the deal affecting roughly 1,200 borrowers, many of whom are in receivership.
Speaking ahead of the bank's AGM today, chief executive Bernard Byrne (pictured) said:
"We continue to focus on our customers' needs, simplifying our operating model and becoming more efficient.
"Our three year €870m investment programme will complete this year and positions us well to deliver for customers and shareholders."
The update comes a day on from the revelation that the Central Bank had fined AIB €2.275m for breaches of money-laundering and anti-terrorist financing regulations.
The Central Bank imposed the fine for six breaches of the 2010 Criminal Justice Act over a three-year period. It is the biggest fine levvied against AIB by the Central Bank and follows a €3.325m fine issued to Ulster Bank last year for similar breaches.
AIB admitted that it failed to report 211 suspicious transactions promptly to Gardaí and the Revenue Commissioners.
The issues related to its former EBS subsidiary rather than the bank overall and occurred up to July 2014.
According to The Irish Times, AIB’s anti-money laundering unit took over 18 months to fully address the backlog, which stood at over 4,200 alerts outstanding for 30-plus days at one point.
Sunday Times business columnist Nick Webb saw it as bad news for the bank:
"This is a really big deal and it's a very, very public fine. It comes at a spectacularly bad time for AIB because as we know it's limbering [up] to float on the stock markets. The State is going to sell up to 25% of the company; remember we bailed out the bank so we own it."
Newstalk business editor Vincent Wall said:
"The really serious element of this is not just that there was a backlog in their processes in dealing with suspicious items but they failed to report in time then on a small number that really did look suspicious to Gardaí."
Plans are afoot for AIB to return to stock markets some time between mid-May and early July.
Some 25% of the State-owned bank is expected to go in a near €3bn flotation on London and Dublin markets. The State currently owns 99.9% of the bank, which was bailed out by the taxpayer to the tune of €20.8bn during the financial crisis.
AIB yesterday was fined €2.27m by the Central Bank for breaches of money laundering and terrorist financing regulations.