Around 350,000 new accounts have been opened with AIB this year to September, around 82% more than during the first nine months of 2021, as customers switch their accounts from exiting lenders Ulster Bank and KBC Bank Ireland.
AIB upgraded its income outlook for 2022 in its third quarter trading updating, claiming strong profitability and loan growth during the quarter.
Total income rose 17% year-on-year due to higher interest rates following decisions by the European Central Bank in recent months. AIB saw a 10% uplift in net interest income, while income from other sources rose 40%.
For the full year, the bank expects net interest income to rise by more than 15%, with the ECB having elected to raise borrowing rates by a further 0.75 percentage points next month and flagging future hikes as well.
Net interest margin for the year to September was 1.57%, compared to 1.48% in the the first six months. AIB subsequently raised fixed mortgages rates by 0.5% earlier this month.
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New lending at AIB has increased 25% year-on-year during the first nine months of the year to €9bn, with €3.5bn lent in Q3, and the company now has 31.2% of the mortgage market. Green lending has represented a quarter (24%) of new lending this year.
The bank's gross loans now total €60.5bn after €1.5bn in corporate and commercial loans from Ulster Bank were incorporated into its portfolio, and non-performing exposures have fallen €700m since December to €2.4bn or 3.9% of gross loans.
Customer deposits of €97.3bn represent a €4.3bn increased from the €92.9bn held in December, thanks in large part to new customers, while costs rose 2%, or 7% inclusive of Goodbody, which AIB acquired last year, due to wage inflation and customer onboarding costs.
"Notwithstanding the global macroeconomic uncertainty and volatility, the Irish economy is demonstrating resilience supported by growth, record levels of employment and low leverage," said Colin Hunt, CEO of AIB.
"Against this backdrop, AIB recorded robust new lending of €9bn to September and as two banks exit the Irish market, we are welcoming new customers with an 82% increase in the number of accounts opened.
"While I am conscious of the cost of living challenges, the Group is well-positioned to support our growing customer base and the wider Irish economy. With upside potential to our >9% [return on tangible equity] target, we look forward to updating the market
with our revised medium-term targets on 2 December 2022.”
AIB paid "a small net credit impairment charge" due to changes in the economic outlook and the day 1 ECL charge related to the migrated Ulster Bank corporate and commercial loan.
AIB's acquisition of €5.7bn in performing tracker mortgages from Ulster Bank is currently undergoing the CCPC approval process.
(Pic: Aidan Crawley/Bloomberg via Getty Images)
