July 27, 2018 / 6:46 AM / 3 months ago

Allied Irish profits steady as big dent made in bad loans

DUBLIN, July 27 (Reuters) - Allied Irish Banks (AIB) reported steady first-half profits, lower bad loans and higher lending and capital on Friday as it continues to recover a decade after the country’s banking crash.

“The financial results for the first half of the year were very good and towards the upper end of expectations. They confirm that AIB continues to deliver against the financial commitments made during last year’s IPO process,” Chief Executive Bernard Byrne said in a statement.

The government sold a 29 percent stake in the bank last year in Europe’s largest initial public offering (IPO).

It reported a pretax profit of 762 million euros versus 761 million a year earlier.

Non-performing exposures (NPEs) fell to 7.5 billion euros from 9.2 billions euros three months earlier, boosted by the sale of a 1.1 billion euro portfolio of bad loans in May. In 2013 its stock of NPEs stood at 31 billion euros.

Irish banks are under pressure from the European Central Bank to reduce bad loans which ballooned after Ireland’s property crash. AIB’s accounted for 12 percent of its loan book at the end of June.

Helped by the best performing economy in the euro zone for the fifth successive year, its new term lending rise by 15 percent to 5 billion euros.

Tier one capital ratio rose to 17.6 percent from 17.1 percent at the end of March, well above its medium term target of 13 percent.

Its share of the fast recovering Irish mortgage market stood at 32 percent in the first half, slipping from 33 percent a year earlier.

Reporting by Padraic Halpin; editing by Jason Neely

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