ALLIED IRISH BANKS performed a €2.8 billion turnaround last year and will deliver its first profit since nearly collapsing during the financial crisis.
The bank, which is 99.8% state-owned after the government sunk €20.8 billion into the company, today reported a pre-tax profit of €1.1 billion for 2014.
That figure compares to a loss of €1.7 billion the previous year, with the company cutting staff and costs, dramatically increasing lending and making more money from its loans over the 12-month period.
AIB also said its board had approved a cash payout of €280 million on the government’s 2009 preference shares, the first time it has delivered a return on the state holding.
The company reported:
The positive results will add impetus for the government to start offloading its stake in the bailed-out bank, although Finance Minister Michael Noonan recently said he only planned to sell a maximum 25% either late this year or early 2016.
Noonan today said the results were “very encouraging” and put taxpayers “in a strong position to regain the €20.8 billion investment in the bank”.
All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions,” he said.
Making more from loans
The bank’s loan margin of 1.69% is still well below that of its main Irish rival, Bank of Ireland, which last week reported an annual profit of €921 million and an average profit margin on its lending of 2.11%.
Interest on loans was worth €1.69 billion last year for AIB, the bulk of the bank’s income.
The company also reported it had cut staff from 12,718 in June 2013 to 11,047 in December last year which had helped to shave 10% from its personnel expenses over the most-recent 12 months.
AIB chief executive David Duffy, who announced in January he was stepping down for a job at the Glasgow-based Clydesdale Bank, said the year saw the bank “successfully execute” its plan to become sustainably profitable and properly funded.
To embed this post, copy the code below on your site
have your say