logo
Share SHARE
FONT-SIZE Plus   Neg

Allied Irish Banks Continues To Expect Turnaround By 2014 As 2011 Loss Narrows

Allied Irish Banks Plc (AIBYY.PK) on Friday said its plan to return to profitability by 2014 remains on target after reporting a narrower loss for the challenging fiscal year 2011.

"The Irish economy has remained weak and consumer and government spending continued to decline in 2011. Credit growth was limited and market conditions have not improved. These challenges have led to an increase in our provisions as consumers struggle to fund their commitments and businesses, large and small, limit their borrowings," the company said in a statement.

These factors together with a low interest rate environment have served to compress margins at a difficult time, it noted.

However, exceptional gains and income from the discontinued Polish operations helped offset these negative impacts.

For fiscal 2011, the Ireland-based bank posted pre-tax loss of 5.11 billion euros, compared to prior year's loss of 12.07 billion euros. On a per share basis, loss narrowed to 0.9 cents from the prior year's 564.0 cents.

The results benefited from income from exceptional items of 3 billion euros relating to liability management exercises and loan disposals and 1.6 billion euros of profits relating to Polish discontinued operations.

Loss from continuing operations before exceptionals was 8.09 billion euros, wider than loss of 5.38 billion euros a year ago. According to the company, the deterioration in performance reflected continuing high provision levels, lower interest income on reducing balance sheet volumes and elevated funding costs.

Total provisions climbed 34 percent to 8.16 billion euros.

Before provisions, the bank reported an operating profit of 2.62 billion euros, compared to prior year's loss. Operating profit excluding exceptional items and before provisions was 68 million euros, lower than 658 million euros a year ago, due to lower levels of income and a 4 percent rise in operating expenses.

Annual net interest income declined 27 percent to 1.35 billion euros. Net interest margin declined to 1.03 percent in 2011 from 1.31 percent in 2010.

Regarding the dividend, the company said no dividend was paid in 2011.

Looking ahead, the company expects that the various steps taken to reduce costs, mainly the voluntary redundancy program, will generate a material reduction in cost structure in future years.

The company also said it has made good progress towards achieving the 20.5 billion euros target of deleveraging non-core assets by end of December 2013, which was a condition of the bank's recapitalization.

In the U.S., Allied Irish Banks closed Thursday's trading at $1.14, down $0.06 or 5.33 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Deutsche Bank (DB) on Sunday reported an about 50 percent decline in first-quarter profit, despite clocking double-digit revenue growth, as the German lender recorded hefty legal charges over allegations of rate-rigging. In a statement, the bank said its results were hurt by litigation expenses of... Casino operator Wynn Resorts said its shareholders ousted Elaine Wynn from the board, reflecting fears that her presence may lead to disharmony with the management. To commemorate the launch of Hubble telescope twenty-five year ago, NASA unveiled celestial fireworks as official image, marked by brilliant tapestry of young stars flaring to life.
comments powered by Disqus
Follow RTT