(Alliance News) - AIB Group PLC on Wednesday said it is trading well and is on track to meet earnings expectations for the full year.
The Dublin, Ireland-based lender reiterated its guidance, saying that it expects a moderate decline in net interest income in 2021. In the first nine months of 2021, net interest income decreased 8%, reflecting the impact of the lower interest rate environment, lower loan volumes and excess liquidity partially offset by momentum in our negative interest rate strategy.
As at September 30, the bank said EUR12 billion deposits were at negative rates, up from EUR4.7 billion as at December 2020.
The loan to deposit ratio was 62% at the end of the third quarter of 2021. The strong trend in customer deposits continued with EUR90.7 billion at the end of September compared to EUR88.3 billion in June and EUR82.0 billion at the end of 2020.
Other income, meanwhile, increased 26% in the nine months to September 30 and within this net fee and commission income increased 15%. AIB Group said it expects 2021 other income to be ahead of 2020 due to a better than expected performance as net fees and commissions return to more normalised levels.
Costs were stable in the first nine months and on a full year basis are expected to decline marginally. Exceptional costs are expected to be EUR350 million in 2021 as guided, the company said.
The fully loaded common equity tier 1 at the end of the third quarter was 16.6% versus 15.6% at the end of 2020, which is well ahead of the company's medium-term target of over 13.5% and regulatory requirements.
"Looking to the fourth quarter and beyond, we expect the steady economic recovery to continue as our customers return to pre-pandemic levels of activity," said Chief Executive Colin Hunt.
"We are increasingly confident about the economic outlook and our ability to generate sustainable shareholder returns, and in this regard the board will consider the resumption of dividends for 2021, subject to regulatory approval," added Hunt.
AIB Group shares were trading 0.5% lower in London on Wednesday morning at 202.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Aib Group (AIBG)