AIB Group heralds 'milestone year' - days after axing First Trust branches
THE parent company of First Trust Bank is heralding "another milestone year" and is preparing for a stock market flotation - just days after announcing it was axing half of its branch network in Northern Ireland.
AIB Group, which is 99 per cent owned by the Irish Government, reported pre-tax profits of €1.7 billion (£1.46 billion) for the year to the end of December.
It also proposed paying a dividend of €250m (£214m) - the first Irish banks to do so since 2008.
AIB's chief executive Bernard Byrne said: "Our strong financial performance and robust capital base support our proposed dividend of €250m to ordinary shareholders.
"This reflects our sustainable profitability, strong capital generation and focus on delivering for shareholders and customers.
"We returned a further €1.8 billion (£1.54bn) to the State during the year, which together with the proposed dividend, brings to €6.8 billion (£5.83bn) the amount AIB will have paid in capital, dividends, fees, coupons and levies."
He added: "The bank is now ready for an IPO, when market conditions permit and the Minister decides.
"With a market leading franchise, strong customer focus and investment in digital, AIB Group is well placed to continue to support our customers and the growing Irish economy.”
But the results come less than a week after AIB's northern subsidiary First Trust confirmed that it was shutting 15 of its 30 branches over an eight-week period this summer following a customer shift towards digital banking.
That move will lead to a number of job losses, though the bank insists it will be by natural wastage or relocation, and there will be no compulsory redundancies.
Larry Broderick, general secretary of the Financial Services Union, said the scale of the closures had come as a "major blow" to staff.
AIB Group's €1.7 billion pre-tax profit was down from €1.9 billion (£1.63bn) in 2015 as a result of writing back far fewer of its remaining provisions for bad loans. Its writebacks for 2016 totalled €294m (£252m)compared to almost €1 billion in 2015.
In its results statement, AIB said its impaired loans reduced to €9.1 billion (£7.8bn) , down about €4 billion since December 2015 and from €29 billion £24.8bn) in 2013.
The bank said the 2016 profits were driven by a strong sustainable business performance, the provision writebacks and once-off benefits including the Visa Europe transaction.