Profits rise to 280m pounds at Allied Irish Banks

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The Independent Online
ALLIED Irish Banks, Ireland's biggest banking group, saw pre-tax profits rise by a third to Ir pounds 293m ( pounds 281m) in 1993 after a strong performance in the US and a return to profit in the UK.

The Ireland division also had a good performance despite difficult conditions at the beginning of the year. The group said this was caused by the exchange rate turmoil and the effect of not fully passing on high interest rates to borrowers.

AIB hopes to expand its operations in the UK now that this division is back in the black, according to Neil Dean, the group's chief financial officer.

Mr Dean said AIB might be interested in buying a UK fund management company or a building society. But he said that fund management companies were relatively expensive, while building societies were still ring-fenced by their mutual status.

AIB restated its accounts after switching its financial year-end to December in line with the UK banks. On this basis the group's UK division made a profit of Ir pounds 7m, compared with a loss of Ir pounds 26m for the nine months to 31 December 1992.

Mr Dean said this was caused by a fall in UK non-performing loans and a big drop in provisions against loan losses.

AIB's success with First Maryland Bancorp in the US continued, with profits of Ir pounds 95m compared with Ir pounds 72m for the nine months to 31 December 1992.

AIB made a Ir pounds 97m provision against the group's future commitments related to Icarom, formerly the Insurance Corporation of Ireland. AIB bought the insurance company in 1983 and then sold it. The company subsequently went into administration.

The Irish government decided AIB should share the burden of running off Icarom's business, and the Ir pounds 97m is a once-and-for-all provision against all future payments relating to Icarom.

AIB paid a final net dividend of Ir pounds 5.65p, which makes a total net dividend of Ir pounds 9.75p, up 12.1 per cent on last time. The key regulatory ratio of tier one capital was 8.2 per cent, while the total capital ratio was 11.9 per cent.

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