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AIB Group PLC on Wednesday revised its annual guidance upwards, after celebrating a ‘very strong’ third quarter. In the nine months to September 30, the Dublin-based bank reported an increase in net interest income of 95% compared with the same period a year prior. It attributed this to higher loan volumes, increased interest rates, and a slower-than-anticipated pace of deposit migration and associated interest expense. Other income increased 10% on the equivalent prior year period, with strong performances across most fee-based lines. Common Equity Tier 1, or CET1, was 16.2% in September, from 15.7% in June. Gross loans were up to €66.8 billion at September 30, compared to €61.2 billion in December. AIB said this was driven by Ulster Bank loan book acquisitions, noting that around €4 billion of Ulster Bank tracker mortgages migrated in the third quarter. Total new lending for the nine months to September was €8.5 billion, down 6% from a year prior. New mortgage lending in Ireland was €2.8 billion, down 7% on a comparatively strong period a year earlier, which included a high level of switching activity. Mortgage market share to September was 32%. Personal lending was up 27% to €900 million, which AIB said reflected an enlarged customer base and an increase in consumer credit demand. ‘The group had a very strong third quarter performance continuing the momentum from the first half and we expect that to continue in the final quarter. Notwithstanding geopolitical uncertainty, AIB remains in a position of strength,’ said Chief Executive Officer Colin Hunt. Subsequently, AIB upped its guidance for the full year. It now expects a return on tangible equity of over 20%, with net interest income over €3.75 billion. Other income is expected to be around €850 million, while costs are set at around €1.8 billion. Customer loans are expected to grow by 10%. AIB Group shares were trading 2.6% higher at 364.00 pence each in London on Wednesday morning. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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