AIB sees half year pre-tax profits of €762m

The bank is holding off on British investments due to uncertainty

AIB sees half year pre-tax profits of €762m

The AIB bank centre in Dublin in 2010 | Image: Julien Behal/PA Archive/PA Images

Allied Irish Banks (AIB) has reported €762m in pre-tax profits for the first half of the year.

It also says total new lending was at €5.5bn, with new term lending having grown 15% to €5bn.

Operating expenses were marginally higher than last year at of €711m, but in line with expectations.

Staff costs were flat while absorbing wage inflation.

The bank says other factors that continue to impact its expenses are investment in loan restructuring operations and increased depreciation.

The bank says: "Mortgage pricing changes and the cost of excess liquidity were absorbed by a favourable mix and lower funding costs on customer accounts."

"AIB continues to perform well and we remain on track to achieve all of our medium term targets.

"In the first half of 2018 AIB continued to make progress on strategic priorities, resulting in robust financial numbers and strong positions in key segments."

AIB Chief Executive Bernard Byrne at the bank's 2018 Annual General Meeting (AGM) in Dublin | Image: Sam Boal/RollingNews.ie

It adds: "We are entering the final stages of the tracker mortgage examination with payments issued to the vast majority of customers, with the remainder being completed by the end of September.

"We know that issues may continue to emerge and we are committed to dealing with them in a transparent and fair way for our customers."

Its market share of mortgage drawdowns was 32%.

The bank's CEO, Bernard Byrne, says: "We have had a positive six months with solid underlying profitability, significant progress towards NPE (non-performing exposures) normalisation, stable NIM and increases in the performing loan portfolio.

"The fundamentals of the business are sound and sustainable.

"The strong Irish economy continues to provide good growth opportunities for our customers and our business."

Mr Byrne also says the bank is holding off putting capital into the British market.

He told CNBC: "The UK's a very small part of the overall portfolio - roughly speaking 90% in the Irish economy and 10% in sterling assets.

"So it's a small part of the marketplace and really we're taking a cautious view of the UK at this stage until we have clarity as to where that economy is.

"We've a good franchise there but we don't need to grow it at this stage given the uncertainty.

"The Irish economy is giving us lots of growth".