(Alliance News) - AIB Group PLC on Friday recorded "strong" profitability and loan growth in the third quarter.
The Irish lender said total income has increased 17% in the first nine months of 2022, aided by higher interest rates - which saw net interest income grow 10%. Net interest margin for the nine-month period was 1.57%, which is improved on the 1.48% recorded in the first half of 2022.
Net interest income is expected to grow by more than 15% in all of 2022, compared to a previous guidance of 10%.
AIB noted EUR9.0 billion in new lending so far in 2022, with EUR3.5 billion coming in the third quarter, thanks to "positive trends" across Retail Banking and Capital Markets.
Chief Executive Officer Colin Hunt said: "I am pleased to report that the group had a strong third quarter and with momentum in our business, we are confident in our delivery for the remainder of the year.
"Notwithstanding the global macro-economic uncertainty and volatility, the Irish economy is demonstrating resilience supported by growth, record levels of employment and low leverage."
AIB said its fully loaded CET1 ratio was 15.4% at the end of the third quarter, which it noted is "well ahead" of minimum regulatory requirements. On top of this, the bank said its acquisition of the EUR5.7 billion Ulster Bank performing tracker mortgage portfolio will reduce CET1 by about 60bps reflecting increased risk-weighted assets of about EUR2.5 billion.
For 2022, it sees customer loans growing 5% to 6%.
Looking further ahead, AIB said it is confident of meeting its upgraded income outlook for 2022. It did note, however, that its medium-term targets are under review - owing to the "changing banking landscape, evolving operating environment and rising interest rates".
In July, AIB said pretax profit in the half-year to June 30 grew 84% to EUR537 million from EUR291 million a year ago. Net interest income grew 2% to EUR895 million from EUR881 million due to lower funding costs.
Shares were down 1.0% at 249.40 pence each on Friday morning in London.
By Xindi Wei; xindiwei@alliancenews.com
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Aib Group (AIBG)