M&T, the New York-based bank in which AIB has a 23 per cent stake, has reported disappointing figures for the third quarter as a one-off charge depressed earnings.
The bank said that earnings per share rose by 5 per cent per share to $1.64 (€1.36) in the third quarter of 2005, below market expectations that had pitched earnings to come in closer to $1.70 (€1.41).
The bank's earnings were depressed by a $29 million charge related to stock issuances of the Federal Home Loan Mortgage Corporation. After tax income increased by 2 per cent to $191 million, up from €186 million in the same period last year.
The bank said the charge had reduced its income by $18 million.
The bank's senior vice president and chief financial officer, Rene Jones, said that while the write-off had affected earnings it was happy with its results.
"Our ability to contain expenses during a period of slow industry-wide revenue growth is in part attributable to success in our areas of focus.
"That success is reflected in the year-over-year improvement in our efficiency ratio," he said.
The bank added that credit quality continues to be very good, with low levels of net charge-offs and non-performing loans.
The third quarter figures also reflect the reorganisation of M&T's subsidiaries last year which decreased its effective state income tax rate for the third quarter of 2004.
As a result M&T's deferred tax liabilities at the end of September last year were reduced by $12 million.
M&T Bank, a wholly owned subsidiary of M&T made a tax deductible $25 million cash contribution to the tax-exempt M&T charitable foundation, which reduced income tax by $10 million.
The aggregate impact of these events reduced third quarter income by $3 million.
Davy Stockbrokers said that M&T was doing a good job containing costs in a challenging revenue growth environment.
The third quarter result bring earnings per share for the nine months to the end of September to $4.95, up 13 per cent year-on-year.
The bank's senior management did not update their guidance range for full-year earnings.
Davy expects that M&T will contributed 11 per cent of AIB group's profits this year.
