AIB looks for further acquisitions in the US: American success helps Irish bank's profits up 42%

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The Independent Online
ALLIED Irish Banks, Ireland's biggest banking group, is seeking further acquisitions on the east coast of the United States, following its success with First Maryland Bancorp.

Analysts said AIB's strong capital ratios put it in a good position to bolt on banks to its existing FMB and York Bank, Pennsylvania, operations in the US. Neil Dean, AIB's chief financial officer, said: 'There are further investment opportunities in the area that we can latch on to our network. We expect to have a greater commitment to the States.'

The US accounted for 42 per cent of AIB's profits in the first half of the year, announced yesterday.

A dramatic turnaround in the performance of its British operations also helped the group to boost half-year profits 42 per cent to Ir pounds 139m ( pounds 131m) before tax. Britain provided Ir pounds 2m against a Ir pounds 17.2m loss last time.

The main generators of growth continued to be First Maryland Bancorp, which reported sparkling profits growth of 37 per cent a fortnight ago, and the capital markets and treasury operations.

But overall results from the US division rose only 17 per cent because of losses in AIB's New York finance company.

Capital markets boosted profits 46 per cent to Ir pounds 33.1m, mostly as a result of turbulence in the European currency markets.

The underlying increase in profits for the group was 25 per cent, as AIB bore exceptional costs of restructruing in the UK and a bank strike in Ireland in 1992.

The interim figures are not a strict comparison with last year's first half because AIB changed its year-end to December to bring it in line with the UK clearing banks. But the group said there were no seasonal factors of any consequence, so the figures were broadly comparable. The 1992 results were also restated to comply with the new FRS3 accounting standard.

Gerry Scanlan, deputy chairman and group chief executive, described the results as robust. 'We had a significant and welcome turnaround in Britain, continued good results in the US, an excellent performance by capital markets, particularly in treasury, and a satisfactory outcome in Ireland given the difficult economic situation in the first quarter.'

The turnaround in Britain resulted mainly from fewer non-performing loans and cost-cutting.

Earnings per share rose 37 per cent to Ir12.9p and the interim dividend jumps 7.9 per cent to Ir4.1p. The shares, a quarter of which are now in UK institutional hands, closed a penny higher at 277p.

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