AIB Bank has recorded a net loss of €741m for 2020, which it says is due to an expected credit loss charge of €1,460m and exceptional items of €215m.

The bank's operating profit fell by almost €360m to €729m, while total income fell by 12%, reflecting a 10% decline in Net Interest Income and a 19% decline in other income.

Gross loans declined by 4% to €59.5 billion. In 2020 the performing loan book decreased by €3.6 billion (-6%) to €55.2 billion due to redemptions exceeding new lending, a net movement of €1.8 billion to non-performing exposures, €0.5 billion leverage loan disposals and foreign exchange impacts.

The 10% fall in interest income was attributed to lower interest rates, while most of the 19% fall in other income was due to fee and commission income of €395m declining 16% on the prior year, predominantly the result of reduced economic activity and changes in customer behaviour, the bank stated.

The latter include the shift from cash to digital payments -- a 39% reduction in the number of ATM transactions in 2020 versus 2019 - and a continued rise in the number of digital wallet/contactless payments, up 71% over the same period.

In Association with

Regulatory costs rose by €11m to €115m, while exceptional items amounted to €215m. The bank expects costs to increase only marginally this year.

Chief executive Colin Hunt (pictured) commented: "I am pleased to report that the fundamentals of our business remain robust, sustainable and strong. We entered this crisis in a position of capital strength which, enabled by our leading digital technology, allowed us to deliver unprecedented levels of support to our customers, communities and the economy when it mattered most.

"I look forward with confidence as we implement our strategy to 2023 at pace, demonstrated by our growth initiatives announced this year. We remain driven by our ambition to be at the heart of our customers' financial lives while sustainably creating value and returns to our shareholders."

The fall in gross lending of 4% included a decline in new mortgage lending in Ireland of 21% in the year to €2.3 billion and personal lending dipping 10% lower than the previous year. Traditional corporate lending was down 10% and there was a 40% decrease in real estate finance lending. SME new lending in the year was broadly flat.

In total, group new lending fell 25% in the year A pick-up in the second half led to a 9% increase in new lending versus the first half of 2020 with growth in mortgages, personal and SME loans.