AIB returns to profitability in Q1

AIB has said in it’s interim management statement that it returned to profitability during Q1 of 2014.

The bank has stated that it had seen a significant reduction in impairment charges, while its overall stock of impaired loans also continued to reduce in the three month period.

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“The underlying operating performance of the bank returned to post-provision profitability in Q1 with performance moderately ahead of expectations both in terms of income generation and provisions,” the bank said today.

AIB said that its total impaired loans eased from €28.9 billion in December 2013 to about €28.2 billion at the end of March.

AIB said it expects the credit impairment charge for the first six months of 2014 to be materially lower than the same period a year ago.

“The reduction in impaired loans was as a result restructuring activity, cures and write-offs offset by new impaired loans. The pace of formation of new impaired loans continued to reduce in Q1 2014. Specific provision to impaired loans coverage was in line with end of December 2013,” the statement said.

Chief Executive Officer David Duffy said AIB returned to profitability in Q1 2014 and progress is evident across a number of fronts.

“We are delivering our stated objectives which include increases in new lending drawdowns, the recent EU Commission’s approval of our restructuring plan, improvement in the cost of funding and capital position, supporting customers in financial difficulty and a decrease in overall impaired loans.”

“Our operating performance is trending positively and notwithstanding the challenges that lie ahead, I believe the bank will continue to deliver against our strategic objectives. The bank expects that discussions with the State regarding simplification of the bank’s capital structure will continue into H2 2014. We remain focused on supporting Irish economic recovery, continuing to build profitability and ultimately returning capital to the State,” added Mr Duffy.