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AIB Group H1 profit down YOY to €650M

AIB Group PLC, the new holding company for Allied Irish Banks PLC, reported unaudited profit attributable to owners of the parent of €650 million for the first half, down from €652 million a year ago.

EPS was flat year over year at 23.3 cents.

The group noted that the 2017 figures are as-reported in the condensed consolidated financial statements of Allied Irish Banks.

Net interest income declined on a yearly basis to €1.06 billion from €1.08 billion, while net fee and commission income increased to €217 million from €195 million. Net trading income amounted to €1 million, compared to €61 million in the first half of 2017.

The group's net interest margin stood at 2.53% in the half, compared to 2.54% a year earlier.

Total operating expenses rose year over year to €896 million from €807 million.

The bank also booked a €140 million gain on disposal of loan portfolios, up from €7 million a year ago.

Net credit impairment writeback totaled €130 million, compared to the year-ago €19 million.

As of June-end, the bank's CRD IV common equity Tier 1 ratio was 21.2% on a transitional basis and 17.6% on a fully loaded basis, compared to 20.8% and 17.5%, respectively, at the end of 2017. At the end of March, the group's fully loaded CET1 ratio stood at 17.1%.

The group's nonperforming exposures balance fell by €2.7 billion since the end of December 2017 to €7.5 billion from €10.2 billion. Since 2013, the group has reduced the overall NPE balance by around €25.7 billion.

"We are making steady progress as we continue to move these loan balances to more normalized European peer levels which is something we are targeting for delivery before the end of 2019," CEO Bernard Byrne said.

"Plenty of challenges still exist, some new and some, like the tracker mortgage examination program, continue to be work in progress. We are entering the final stages of this examination with payments issued to the vast majority of impacted customers with the remainder being completed by the end of September," Byrne added.

The group has determined in 2018 that a further €25 million provision is required bringing the amount of provisions for customer redress and compensation at June 30 to €29 million to cover payments to additional customers identified as impacted in 2018, as well as the remaining customers that had yet to receive redress and compensation by June-end. Payments to these customers is expected to complete by Sept. 30.