DUBLIN, March 1 (Reuters) - Allied Irish Banks(AIB) will raise its dividend, it said, after annual results onThursday that showed higher capital, lower nonperforming loansand a drop in pretax profit on fewer one-off gains.
In its first set of annual results since the state sold a 29percent stake in Europe's largest initial public offering (IPO)of 2017, AIB proposed dividend payments at 12.0 euro cents pershare, totalling 326 million euros ($398 million).
That compared to a 250 million euro payment made to thegovernment a year ago when the then 99.9 percent state-ownedbank became the first domestically owned lender to restartdividend payments since the financial crisis.
AIB's tier one capital ratio rose to 17.5 percent from 15.3percent a year ago, far above its medium term target of 13percent. Its expected level of excess capital over the next twoto three years was a key selling point in last year's IPO.
AIB plans to return the excess capital to shareholders inthe first part through normal dividends with the remainderavailable via special buybacks or other means.
AIB, whose original 21 billion euro taxpayer bailout was thebiggest for any Irish bank still trading, reported a full yearpretax profit of 1.3 billion euros, down from 1.7 billion.
Excluding exceptional items, its annual profit rose 6percent to 1.57 billion euros.
AIB's net interest margin rose to 2.58 percent from 2.57percent in the third quarter while its impaired loans fell by2.8 billion euros to 6.3 billion.($1 = 0.8193 euros)(Reporting by Padraic Halpin; editing by Jason Neely)