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Dublin: 18 °C Thursday 24 July, 2014

AIB ‘on track’ to achieve target pre-provision operating profit

The bank says that, after setting funds aside to provide for bad debts, it should return to operating profit for the full year 2013.

Image: Niall Carson/PA Archive/Press Association Images

AIB SAYS IT is “on track” to achieve its target of returning to pre-provision operating profit for the full year 2013 following “strategic actions” taken last year, which have delivered an improvement in the bank’s overall operating performance.

In an interim management statement, AIB said product repricing has had a continued positive effect on the net interest margin (NIM) in the first quarter, marking the second consecutive quarter of progress on NIM. Added to this, the ending of the Eligible Liabilities Guarantee Scheme (ELG) for new liabilities is also expected to benefit operating income.

The bank said cost reduction continued to be a priority and that staff costs and other expenses had been “materially lower” year on year.

AIB said its loan portfolios were performing in line with projections, and that it expects bad debt provisions for this year to be be significantly lower than 2012 based on current expected economic performance.

In relation to offering sustainable permanent solutions for mortgage and SME customers in financial difficulty, AIB expressed its commitment “to meeting or exceeding the targets set by the Central Bank of Ireland in relation to mortgage arrears”.

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