Irish bank AIB lifts guidance for third time this year
Reuters
Published Nov 01, 2023 08:10
DUBLIN (Reuters) - Irish bank AIB Group lifted its full-year income guidance for the third time this year on Wednesday after a higher interest rate environment contributed to a "very strong" third quarter that it expects to continue in the final three months.
AIB, one of three high street left lenders in Ireland after two other rival banks exited the market, said its total income in the first nine months of the year increased by 70%, with net interest income (NII) up 95% year-on-year.
The bank, which had a 32% share of the Irish mortgage market at the end of September, now expects NII of more than 3.75 billion euros this year, raising a July forecast of 3.6 billion and an initial estimate of 3 billion euros in March.
It increased its net interest margin (NIM) forecast to above 3% from 2.70% and expects return on tangible equity (ROTE) in excess of 20% this year, well above its medium-term target of above 13%. The bank had forecast ROTE of around 20% in July.
AIB's NIM - a key metric that shows how profitable its lending is - stood at 3.08% at the end of September, while its fully loaded core tier 1 capital ratio - a measure of financial strength - rose to 16.2% from 15.7% three months earlier.
Analysts at Davy Stockbrokers said the consensus forecast for 2024 net interest income of 3.6 billion euros appears on the conservative side, based on Wednesday's trading update.
AIB's main rival Bank of Ireland last week lifted its guidance for the second time this year.
Ireland's two dominant lenders have benefited from higher rates and the decisions by KBC and NatWest (LON:NWG) to shut their Irish businesses and sell their loan books to the banks that continue to serve the market.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.