AIB trims first-half losses to €758 million, down from €1 billion lost last year

AIB trimmed losses in the first six months of the year by 28 per cent to €758 million, according to figures published yesterday by the State-controlled bank.

The bank reported yesterday that operating profits for the first six months of the year were €162 million, against a €110 million loss during the same period in 2012.

It set aside €738 million to cover bad debts, 24 per cent less than the €973 million provision it made at last year’s half way point.

As a result, its operations lost €572 million in the six months to the end of June, about half the €1.08 billion loss for the same period in 2012.

A €266 million bill for exceptional items less an €80 million tax credit left it with a loss for the six months of €738 million, 28 per cent less than the €1.05 billion it lost in the first half of last year.

Exceptional costs
The exceptional costs included a €187 million loss on the sale of some of its loans, and a further €24 million on the transfer of financial instruments to State agency Nama.

Its voluntary redundancy and early retirement programmes, part of an overall drive to cut expenses, cost it €40 million, while other restructuring expenses, including the closure of its businesses in the Isle of Man and Channel Islands came to €28 million.

The figures published yesterday show that staff costs for the period tumbled 16 per cent to €448 million from €532 million, while general and administrative expenses were down 14 per cent at €255 million from €296 million.

The bank has been cutting jobs and closing branches as part of a drive to cut expenses. Its cost-income ratio for the six-month period was 82.3 per cent, expenses actually outstripped income by more than 14 per cent during the first half of last year.

Chief executive David Duffy pointed out that 18 months ago the bank set out to return to "sustainable profitability" by the end of 2014, and said it was still on track to achieve this.

'Progress to continue'
"The bank's results for the first half of 2013 demonstrate that our strategy for stabilisation and recovery is delivering results," he said. "I expect that the overall progress made in the first half of 2013 will continue through this year."

AIB was nationalised during the financial crisis at a cost to taxpayers of €20 billion.

The new figures show total income rose 19 per cent during the period to €916 million from €771 million in the first half of 2012. Net interest income was up 5 per cent at €595 million.

“Other income”, which includes bank charges, commissions and earnings from activities such as foreign exchange and other contracts, advanced by 58 per cent to €321 million.