'Strong profits growth' for AIB

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The Independent Online
ALLIED IRISH Banks saw returns improve from its operations in the UK and the US last year.

Losses in the UK fell from pounds 43m to pounds 25m after a loss of pounds 37m in the discontinued commercial mortgage business. The British branch network was profitable, making a return of pounds 12m.

In the US, where AIB still has ambitions to make further acquisitions to add to its regional bank, First Maryland Bancorp, pre-tax profits rose from Ir pounds 69.7m to Ir pounds 91m ( pounds 93m).

This helped the group to a pre- tax profit worldwide of Ir pounds 171.6m in the nine months to the end of December, following a change of year- end, compared with Ir pounds 185.8m for the previous full year.

But restated to compare two full years' performance, the results showed what Neil Dean, chief financial officer, called a 'strong profits growth momentum', with an increase of Ir pounds 25m to Ir pounds 213m before tax.

Adjusting earnings per share for a full year, there was an increase of 18.6 per cent to 19.1p, while the dividend was raised an annualised 5.5 per cent.

First Maryland contributed a full year to the nine-month results, since its year-end already coincided with AIB's new accounting period.

Mr Dean said he expected the positive performance to continue in the US, while the turnaround in Britain would be sustained if current economic trends continued. Bad debts have peaked and non- performing loans have stabilised.

For the group, bad debt provisions have fallen back from Ir pounds 182m to Ir pounds 167m on an annualised basis.

Mr Dean said the group's policy was to 'enhance the core franchise' in the Maryland area by making acquisitions, although there was currently a shortage of acceptable propositions.

In the UK the bank continued to be interested in buying a building society. But Mr Dean said the prospects for a deal did not look good and the strategy would hold back for the moment.

'We are neutral at the moment. We don't see any building societies on the market available. If a good one does come on the market it is likely to be very expensive. In the rest of financial services, the opportunities are either too big or they are niche players.'

AIB said the integration with the former TSB Bank in Northern Ireland, which it recently acquired, was progressing as planned under a new trading name, First Trust Bank.