AIB chief executive Colin Hunt. Photo: Steve Humphreys
AIB has reported a drop in net profit to €927m for the first half of the year, down 16pc, as declining European Central Bank interest rates ate into its net interest income.
New lending was up €600m to €6.9bn, due to growth in mortgages, corporate and personal lending, the bank said.
Total income decreased 10pc primarily driven by lower interest rates. Net interest income (NII) decreased to €1,874m.
CEO Colin Hunt said the bank had delivered another strong performance in the first half of the year.
“The group continues to perform well in a resilient Irish economy against a backdrop of macroeconomic and geopolitical uncertainty. New lending was up €600m to €6.9bn, due to growth in mortgages, corporate and personal lending,” he said.
Return on tangible equity was 21.4pc and the bank announced an interim ordinary dividend payment of €263m.
Despite falling interest rates the bank said the outlook for NII remained resilient due to factors including growth in the loan book, a stable and granular deposit base, and proactive balance sheet management with €15bn added to a structural hedge programme and €2.2bn added to an investment securities portfolio in the first half.
For 2025 the bank continues to expect NII of more than €3.6bn based on rate assumptions, including an ECB deposit rate of 1.75pc and a Bank of England rate of 3.75pc at December 2025.
Non-interest income of €358m decreased by 9pc as higher fee and commission income was mainly offset by lower equity investment gains.
Meanwhile, the bank’s operating costs were €979m, up 3pc in line with guidance and primarily reflecting the impact of inflation and higher opex-related investment spend, partially offset by lower staff numbers.
The bank’s full time headcount reduced by 2pc to 10,375.
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