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THE STATE-OWNED Allied Irish Banks (AIB) has reported losses after tax of €2.3 billion for 2011 in its annual report released today.
The figure is an improvement on 2010 losses of €10.2 billion and follows the setting aside of €7.9 billion to provide for expected losses on loans including €1.6 billion on residential mortgages.
Around €1.7 billion of the figure is related to the bank’s land and development portfolio, €2 billion to its property investment portfolio, €1. 6 billion for Small and Medium Enterprises (SME) loans and €500 million each for corporate and other personal loans.
Operating profit before provisions was €68 million which compares to €658 million for 2010. The reduction was attributed to lower levels of income which was down by over €500 million or 22 per cent and a rise in costs of €71 million.
“Our plan is to return to sustainable profitability by 2014. Achieving this will be key to our ambition to provide an opportunity to attract private investment and return value to our principal shareholder,” chief executive David Duffy said today in a statement.
The number of customers with the bank who are in mortgage arrears of more than 90 days rose to 10.9 per cent by the end of December, up from just under three per cent a year earlier.
Mortgage loans classified as impaired stood at €1.6 billion and a further €897 million were categorised as past due. These figures represent a rise from impairments of €470 million and loans past due of €651 million in 2010.
The banks operating expenses of €1.7 billion were 4 per cent higher than in 2010 although half of this was attributed to the inclusion of €42 million of costs for staff from EBS building society.
Under the government’s recapitalisation programme, AIB is one of the main pillar banks which has taken over the building society. AIB is currently 99.8 per cent owned by the State.
Earlier this month the bank said it was seeking 2,500 redundancies in a bid to cut costs. It is thought to be the biggest redundancy programme announced by a bank in the history of the State.
AIB also recently announced that it will reintroduce transaction fees in May, charging customers for transactions unless they have cash balances of at least €2,500 in their account for an entire three-month period.
Duffy added: “We are confident that as a pillar bank we will be able to provide the support required by the Irish economy and our customers over the coming years.”
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They’ll just introduce extra charges on their customers & sack all of the low paid staff who gambled sweet FA during the boom years. I think that’s called “bend over economics.”
And still pay the monkeys sat the top of the tree over €800,000 !!
very true Ryan oNeill, how a business can report a huge loss while paying the top layer approx half of what the business lost. makes no sense
How will we end up footing that bill…
I wonder. I heard the government may or may not be receiving a cash lump sum from a large group of donators in a day or two. Maybe most or all of that generous donation will be going towards this.
Quick, give the head man a large bonus!!
That ‘pillar’ looks decidedly shaky.
On a positive note it beats the loss of over €10 Billion last year.
Are they still paying for the golf club and gym memberships for staff?
Reg, I dont understand how anyone can red-thumb that very legitimate question….
You can be damn sure, that 2500 staff being made redundant, will not include the top level management, responsible for the losses… The “Chiefs” will still go out an play golf and eat and drink (using expenses) the best food and wines, tax-payer money can buy. FFg/Labour, just continuing the same failed policies regarding the banks as their predecessors …. If it wasnt so bloody serious, or if you heard about it an another country, you would laugh your head off… And the boss got 800,000 last year (total package) … Does anyone remember any promises, that no-one would get more than 500k????
Yes reg, they are. I personally know an employee and the perks still run thick and fast. FACT!
@Cal….
Income caps don’t really apply to friends who pull the strings if you know what I mean. Brendan Howlin just today said he’s not happy about it but sure as hell is not going to anything about it!!, it’s the classic case if who you know and not what you know.
AIB really reflects the sorry state of this country. A huge number of loans will not be repaid. This is down to very reckless lending by the banks. The government approach seems to be to hope that the citizens will cough up enough taxes to off set these huge losses. It should be clear that this is only wishful thinking and they are required to stop misleading the people that our debts are sustainable.
”AIB reports losses of €2.3 billion for last year”??
How about
The Government arranges for Bust Bank to take €2.3 Billion from Irish people, without their consent,last year.
Don’t worry folks, we’ll spot you the loss.
Actually.. forget spotting it, we don’t need it anyway!
Roads are grand, infrastructure is grand, banks are.. oh… huh…
They will be getting a pay rise for there great work.
2.5K of “them” are being made redundant this year
Eugene, we have yet to see if it will be 2.5k made redundant, and you can be sure it’s the admin/front of house staff that are on the average industrial wage not the lads at the top who speculated/and threw money at people only to get it wrong and burn the system!! These people who had their fingers in the cookie jar will get off Scott free and still claim stake to a €800,000 pay packet. Clearly you have the two mixed up!!
@ Ryan oneill. I am aware it will be front staff/admin. That was my point in saying “them” as the person who put the initial comment up stated “They will be getting a pay rise for there great work” and did not refer ro “them” as management, staff, etc. The people at the top of AIB have been replaced since the collapse. I honestly could not care if the CEO was on a million plus once he sorted it out and I think that if he gets the company back into profit in a legitimite and transparent way open to inspection. My point being is if we pay someone a million and they get the business making €10bn profit it is a cheaper investment for the tax payer than throwing money into a black hole each year. It strange but no one wants to see AIB make money again here and the only way we are going to get rid of the damn thing is for it to make money as a viable business and in a few years float it back on the stockmarket to get the taxpayer their (some) monies back. In relation to people getting away scott free if they have committed a crime then yes they should pay and I am sure Gardai and the DPP etc are working on that. People are saying they will get away etc but honestly with the cuts etc in the Public Service (Gardai) in numbers and salaries I would be thinking they want to nail them and make sure no loop holes to get off.
If your looking at it as a viable business it should have been let fail as business should if they can’t ‘manage’ how to run it. Secondly I disagree about payment, it seems to me that no matter how much income “their” on, they still duff it up. What about all the stress tests that happens last year, worse case scenario was predicted and capitol pumped in and they still can’t get it fixed, looking for more. When will this business admit defeat and fail……never because the tax payer has deep pockets do it seems!! I think I will agree to disagree with your views. And apologies on the misunderstanding of “them”. Good day.
@Ryan. I agree with you about that it should have been let to fail but we need to move forward now and get rid of it out of the tax payers pocket and I only want the cheapest and quickest way to get the job done. FF screwed us over big time with the EU/IMF deal and blanket bank guarantee so the sooner we can get rid of AIB etc out of the public purse and the EU/IMF running our finances the better.
AIB “pillar” bank? If that bank is one of the pillars on which the Irish economy is built then get ready for an almighty crash! The total mismanagement of that bank by the morons who ran it and indeed continued to run even after the crash only shows what a disaster it really is, it’s another black hole just like Anglo. Their recent decision to reintroduce bank charges and transaction charges is not going to make people want to keep banking with them in fact anyone with half a brain should be looking to somewhere that allows them to bank for free. AIB is a mess and the govt. ought to come clean with the tax payers and admit that it’s never going to get the money back that it has sunk into this sorry abyss of a bank!
@ Ed. Yes its a mess but they have made huge progress as the previous year was over €10 billion. That is a decrease on losses of €8 Billion in a year which is some achievement to have done. People don’t want bank charges and yes I understand why as getting bailed out by the tax payer etc but not all tax payers bank with AIB so therefor there customers should pay for the services provided to them and if they don’t feel they are getting value for money move banks. I would say within 6 months all the banks will reintroduce fee’s anyway. Forget that its a bank for a minute and compare it to a Post Office you pay for postal order and no one has a problem for it yet paying for a cheque is a problem.
One never knows when one may need a dig out.
Never burn your bridges with big business.
aib it should be let go to the wall no more money for bad banks
€10.2 billion loss 2010+€2.3 billion loss 2011=€5.4 billion profit 2012 ? Maybe thats why they are cutting jobs this year, the more money they make the more valuable our stake is.This is a good news story.
If I ran a company @ a.loss like this bank the company would be closed. Do corporate laws not apply here.
have your say