AIB HAS POSTED its first profit since being bailed out by the Government in 2009.
A statement released by the bank today said that it had returned to profitability and also posted a significant 60 per cent increase in lending draw downs during the first quarter.
The amount the bank lent out during January-March was €1.1 billion.
Chief executive David Duffy said: “AIB returned to profitability and progress is evident across a number of fronts.”
So what does it all mean?
- AIB has made progress, albeit slow, on the level of impaired loans it holds. These amounted to €28.9 billion at the end of last year, which the bank has managed to reduce to €28.2 billion now.
- Residential mortgages seem to be the most stubborn category of impaired loans. AIB said that this category was the only impaired loan category to grow, although it didn’t say by how much.
- Lending approvals for the cash-strapped SME sector increased by 25 per cent compared to Q1 2013, but the bank shed no light on how much of this is drawn down.
- Mortgage drawdowns are significantly higher than last year, with a 50 per cent increase and more approvals also recorded. Arrears in its mortgage book were stable during the quarter.
- The bank isn’t showing much of its hand on the debt-for-equity deal it is working on with the Government. AIB wants to swap €3.5 billion it owes the state for shares in the company. It said it hopes to strike a deal with the Government on this during the second half of the year, and that it will “consider options in respect of repayment of capital to the State.”