AIB Group (A5G) H1 2024 earnings summary

Executive summary

• Profit after tax rose 30% year-over-year to €1,108m, with return on tangible equity at 25.5% and a robust CET1 ratio of 15.5%.

• Net interest income increased 18% to €2,075m, with total income up 12% to €2,470m and new lending up 13% to €6.3bn.

• State shareholding reduced to 25.5%, with over €16bn returned to the State and a €505m exceptional distribution approved.

• 34% of new lending was green or transition-focused, with €2.1bn in climate action lending in H1 2024.

• All business units performed well, with Climate Capital making a significant contribution to new lending and profitability.

Financial highlights

• Net interest income €2,075m (+18%); total income €2,470m (+12%); net fee and commission income €336m (+10%).

• Operating expenses €947m (+6%); cost/income ratio improved to 38%.

• Gross loans €68.9bn (+3%); new lending €6.3bn (+13%); customer accounts €107.0bn (+2%).

• Net interest margin 3.24%; EPS 42.0c (+35%).

• Net credit impairment charge €61m (18bps cost of risk); ECL coverage 2.3%.

Outlook and guidance

• 2024 NII guidance upgraded to circa €4bn; other income expected to exceed €700m.

• FY 2024 cost increase expected at 6-7% plus €25m one-off OpEx.

• Cost of risk expected at the lower end of 20-30bps; customer loans to grow by at least 4% in 2024.

• Medium-term targets: costs below €2bn, CET1 above 14%, ROTE of 15%.

• Irish economic growth expected to pick up in 2024 and 2025, supported by easing inflation and strong wage growth.