AIB reports €1.375bn pre-tax profit
The country’s biggest bank, AIB, last year built up one the largest profits recorded by an Irish company.
The group’s annual results for 2002 today reported a pre-tax surplus of €1.375bn.
The attributable profit figure increased on the year by 4%, to €1,037bn, and adjusted earnings per share rose by 6%, with the total dividend up 12%.
During the year, AIB also faced multi-million losses because of the activities of rogue trader John Rusnak – subsequently jailed for seven years – at their former Allfirst American subsidiary company, in Baltimore, Maryland.
The bank’s operating profit ahead of provisions increased 5% in Ireland, 4% in the United States and 9% in Britain and Northern Ireland.
Chief executive Michael Buckley, who came under intense pressure a year ago after the scale of the Rusnak affair losses became evident, said last year had been one of slowing economies and difficult financial markets.
But he was able to assert: “It was a particularly good year for us. We made some significant market share gains, and there was increasing momentum in the second half.”
He added: “AIB also had to deal with foreign exchange trading fraud in Allfirst. I am certainly not about to forget that one, but I think we are over it and we dealt with it well.
“We have done a huge amount of work to ensure that in the areas where our risk management systems failed, they will not fail again.”
Mr Buckley also reported: “The 6% growth in adjusted earnings per share represents a strong performance in the circumstances. Strong growth in customer revenues was combined with our long-standing prudent approach to risk assessment.
“Business volume in Ireland, Northern Ireland and Britain was very buoyant, with significant market share gains.”
He said, too, that the recently disposed-off Allfirst business remained stable as its transition to the American MandT Bank was finalised.
Mr Buckley said: “We look forward to another strong underlying profit performance in 2003.”
The AIB chief went on to identify the fallout of a potential war in Iraq as the greatest threat facing his bank and the Irish economy generally.
He commented: “The biggest risk in the short term is the set of risk associated with the war in Iraq. Beyond that, part of our banking business where we see the most risk is in the corporate banking business.”
“We saw that many banks last year had problems caused by individual shocks from business in which they were involved. I think we’ve seen the worst of that in 2002 but we could still see some more in 2003, particularly in the event of a war in Iraq and the effect on oil.”
