AIB Group plc (LON: AIBG) have released a recent trading statement on Tuesday morning. Despite challenging political conditions the bank delivered a solid performance however, shares have fallen slightly.
The Dublin-headquartered bank said net income “remained steady” in the nine months ended September 30.
AIB’s net interest margin for the period was 2.42%, though taking a 7 basis point hit year-to-date from excess liquidity and further weakened by a drop in investment securities income and “increased MREL-related funding costs”
Despite the tough market conditions, the fact that AIB have managed to deliver positive results will suffice shareholder appetite.
Other competitors have found it tough to operate in the market, as we have seen the crisis at Deutsche Bank AG (ETR: DBK) continue, whilst HSBC (LON: HSBA) and Lloyd’s (LON: LLOY) have reported third quarter losses.
“We continue to take management action in relation to negative deposit pricing. Due to the distortionary impact on NIM from excess euro liquidity volumes grossing up our balance sheet, we expect our full-year NIM to be marginally below 2.40%,” said AIB.
AIB have made a concerned effort to cut costs within operations, expecting annual costs of around €1.5 billion.
As of September 30, gross loans stood 0.3% higher at €62.7 billion versus €62.9 billion at the end of 2018.
While the performing loan book was up 2.3% at €58.1 billion from €56.8 billion.
Customer accounts rose 3.7% to €70.2 billion from €67.7 billion on a “strong Irish macro-economic backdrop” and the loan to deposit ratio on September 30 was 87%.
Chief Executive Colin Hunt said: “Following a solid operational performance in H1, we continue to focus on controlling the controllables; non-performing exposures, quality of lending and cost discipline. Our recently announced portfolio sale brings our 2019 c. 5% NPE milestone into sight. We continue to align our business to serve our customers sustainably and look forward to updating the market in Q1 2020 with our strategic refresh and intentions for capital return.”
Shares of AIB fell 1.62% during Tuesday and are trading at €3 per share. 5/11/19 12:43BST.