AIB Group has recorded a 10.5 per cent increase in pre-tax profits to €1.25 billion (£980 million) in 2000 - the equivalent of £2.7 million every day.
The group said yesterday it was confident it could continue to grow at a strong pace again this year. Some 56 per cent of the bank's profits were generated outside Ireland, mainly in the US and UK, with its operation in Poland also beginning to make a contribution.
The results were slightly better than expectations following concerns that a slowdown in the US economy, in particular, would affect the 2000 outturn. AIB shares closed weaker in Dublin yesterday despite the good results, ending the day at €12, down eight cents.
Earnings per share increased by 15 per cent to €1.04. On the back of the healthy rise in profits, shareholders will be paid a 15 per cent increase in their dividends to 38.75 cents per share on April 26th. Announcing the results yesterday, chief executive Mr Tom Mulcahy, who will retire in June, said AIB was well positioned for the future. "We are still determined to maintain double-digit earnings per share growth," he said.
Mr Mulcahy also reaffirmed the bank's commitment to the US economy. "We are committed to the US. We have been there since 1983 and have a very good franchise." Despite concerns about the health of the US economy, Mr Mulcahy insisted the bank was very comfortable with its US loan book.
AIB's operations in the US - Allfirst in Maryland and Allied Irish America, a business which provides services to charities and not-for-profit foundations - generated €337 million or 25 per cent of group profits, a 10 per cent increase on 1999. The bank hopes to complete two acquisitions there within six months to strengthen its Allied Irish America business.
The UK, where AIB specialises in the small-to-mediumsized business sector, added 23 per cent of profits and is included in the results for the biggest and most profitable part of the group, AIB Bank. This includes the Irish, UK and Northern Ireland businesses, which together achieved a 19 per cent rise in profits last year to €696 million.
Growth in loans advanced, deposits and fees and commissions earned from its life assurance and stockbroking activities pushed profits well ahead. The bank has been particularly aggressive in the mortgage market, claiming 26 per cent growth in the number of home loans advanced last year.
Operating expenses were maintained at 2000 levels, with the bank's cost to income ratio holding steady at 58.6 per cent. The bank has stated that asset quality is very high across the group, with provisions for nonperforming loans in the Republic at an all-time low.
AIB's two banks in Poland, Wielkopolski Bank Kredytowy (WBK) and Bank Zachodni, made the first significant contribution to group profits. Bank Zachodni was the main contributor to the €88 million profit, an increase of 40 per cent on 2000.
