AIB Group has announced full-year net profit €645m for 2021 and plans to return €213m to shareholders through dividend payments and share buybacks.
The proposed distributions at 7.8c per share represents a 40% payout, and the dividend payment will be 4.5c per share.
Net interest income for the year declined 4.2% to €1.8bn and operating profit was static at €2.4bn. Operating profit before accounting for impairments was €370m compared with €510m in 2020.
The bank’s income statement benefited from a €240m impairment write-back after the lender over-reacted to Covid in 2020 when booking a €1.5bn impairment charge.
The net profit of €645m reported for 2021 compares with the €930m loss booked in 2020.
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CEO Colin Hunt said 2021 was “a year of very significant progress across the group despite uncertainties related to the Covid pandemic”.
Hunt said the bank intends to simplify, streamline and strengthen the business to sustainably generate value for its stakeholders.
AIB said that new lending increased by 13% to €10.4bn, and that H2 new lending grew by 28% versus H1. ‘Green lending’ increased 37% to €2bn and now represent one-fifth of total new lending.
According to the bank, their Ireland mortgage market share was 28.3% last year and there is a strong home lending pipeline into 2022.
Customer deposits increased by €11bn to €93bn, reflecting suppressed spending activity by consumers and businesses through much of 2021.
The bank disclosed that c.€12bn deposits are now priced at negative rates, up from €4.7bn at December 2020.
AIB’s consumer lending declined 5% year-on-year, though the bank expects a reversal of this trend, with some positive indicators in evidence in early 2022.
In the annual results statement, AIB stated that sentiment in the SME sector has been mixed over recent periods.
“New commercial lending to the sector was down 3% in 2021 although Q4 showed strong growth of over 26% on the previous quarter,” according to the bank.
AIB is expecting another strong year of growth for the Irish economy through 2022 and has pencilled in estimated loan book CAGR of c. 5% to 2024.
Photo: AIB Chief Financial Officer Donal Galvin (left) and CEO Colin Hunt. (Pic: Shane O’Neill/Coalesce)
