The State is in line for millions of euro in dividends from AIB as the company prepares to publish its interim results for the first half of 2018 on Friday.
Analysts at Investec expect net income of between €550 million and €600 million, with earnings per share of 20 to 22 cent and a net impairment write back of up to €250 million.
An estimated dividend of €130 million, or 4.8 cent per share, could be payable to shareholders, with the State set to scoop more than 70 per cent of it.
The underlying net interest margin is expected to stay stable, analyst Owen Callan said, given the increased cost of HoldCo debt issuance and cuts to fixed rate mortgage pricing. These would be offset by a fall in deposit pricing, and a further roll off of tracker mortgages.
The disposal of Project Redwood is likely to reduce gross lending to around €62.5-€3 billion, down from€63.6 billion. Net loans are expected to hold steady around €60-€60.5 billion.
“We see the potential for AIB’s market share of residential mortgages having come under further slight pressure in Q2 given the price cuts announced across the sector into the end of last year, with the additional recent sharp rates cuts recently announced by Ulster Bank and KBC likely to keep this pressure on into H218,” Mr Callan said, adding that AIB was expected to cut its own rates in the third quarter.
