Aib Group Plc · EURONEXT:A5G
Aib — Allied Irish Banks, p.l.c. — H1 2001 Earnings Presentation
39 slides from Aib's earnings presentation, 2001
Slide 1: Allied Irish Banks, p.l.c. Interim Results 2001
Allied Irish Banks, p.l.c. Interim Results 2001
Slide 2: Forward looking statement
Forward looking statement A number of statements we will be making in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward- looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ
Slide 3: Michael Buckley
Michael Buckley
Slide 4: Shareholder value
Shareholder value Profit before Taxation €667m +12% Profit Return on Attributable Equity €463m +11% +14% 20.4% Tangible Dividend per EPS * share 55.4c 15.4c * excludes €13m goodwill amortised 1
Slide 5: Highlights
Highlights * Strong retail momentum continues in Ireland and Britain - profit up 15% Rep. of Ire. - profit up 16% deposits +16%, home mortgages +22% GB & NI - profit up 13% deposits +18% Capital Markets - profit up 13% corporate banking loans + 27%, fee income + 47% * growth since June 200
Slide 6: Highlights
Highlights \….. Cont. Allfirst - earnings up 6% - Q2 earnings up 10% - strong asset quality Poland - challenging economic conditions - merger completed - investment programme on target Cont …/ 3
Slide 7: Highlights
Highlights \….. Cont. Other income up 13%, now over 40% of total income Prudent provision cover across the Group Profitable Singapore experience 4
Slide 8: Key performance drivers
Key performance drivers Strong customer revenues Costs well managed Continued investment for sustainable growth Asset quality maintained 5
Slide 9: Customer driven business - core strength
Customer driven business - core strength* Relationship Businesses 98% Asset & Wealth Management Banking Business & Advisory Business 13% 2% 85% Other * for illustrative purposes only 6
Slide 10: Different markets - one approach
Different markets - one approach Transferable core competence in retail & commercial banking Relationships at heart of our business Focussed Asset & Wealth management Vibrant corporate banking business spans our markets Sharing eBusiness initiatives & exploring opportunities 7
Slide 11: Outlook - Ireland
Outlook - Ireland Above trend growth will be generated by: Harvesting own customer opportunities Further productivity gains through channel optimisation Maintaining asset quality 8
Slide 12: Outlook - GB & NI
Outlook - GB & NI Leveraging off proven success in SME niche Building on unique customer franchise in Northern Ireland Monitoring of market for acquisitions / alliances 9
Slide 13: Outlook - USA
Outlook - USA Restoring revenue momentum by repositioning / business mix Retain asset quality and efficiency foundation Nourish and invest in „Not for Profit‟ business Actively pursue footprint expansion 10
Slide 14: Outlook - Capital Markets
Outlook - Capital Markets Buoyant revenues in corporate banking - domestic and international Strong deal flow in advice led businesses 11
Slide 15: Outlook - Poland
Outlook - Poland Building national position from strong regional base - medium term growth - investment in network expansion - investment in new branch banking platform - realise cost benefits of merger Intense focus on loan portfolio 12
Slide 16: Conclusion: Strong, deep and resilient franchise
Conclusion “Strong, deep and resilient franchise” 13
Slide 17: Gary Kennedy
Gary Kennedy
Slide 18: Performance by division
Performance by division Jun Jun Change 2000 €m 2001 % 323 AIB Bank 372 15 164 USA 170 4 90 Capital Markets 101 13 45 Poland 26 (42) (13) Group (2) 609 Group profit before tax 667 9 442 Group profit after tax 502 14 414 Group profit attributable 463 12 14
Slide 19: Operating income
Operating income Jun Jun Change 2000 €m 2001 % 985 Net interest income 1,067 8 611 Other income 720 18* 1,596 Total operating income 1,787 12 38.3% Other income ratio 40.2% Other income (*constant currency basis +13%) Banking fees and commissions up 16% strong corporate banking, credit card and
Slide 20: Loan growth
Loan growth Since December 2000 % 10 8 7 6 4 4 5 -3 0 -5 Group Rep. of Northern Britain USA Poland Ireland Ireland Rep. of Ireland residential mortgages up 9% 16
Slide 21: Deposit growth
Deposit growth Since December 2000 % 10 10 8 6 4 4 3 4 3 1 2 0 Group Rep. of Northern Britain USA Poland Ireland Ireland 17
Slide 22: Net interest margin
Net interest margin H1 H2 H1 Change on 2000 2000 % 2001 H1 2000 bps 3.10 2.94 Group 2.93 (17) 2.73 2.76 Domestic 2.67 (6) 3.40 3.08 Foreign 3.16 (24) 18
Slide 23: Operating expenses
Operating expenses Jun Jun Change Underlying 2000 €m 2001 % Change % 545 Staff costs 631 16 12 379 Other expenses 429 13 9 924 Total operating expenses 1,060 15 11 Costs include: BZWBK merger and investment AIA investment Euro and RoI - front loaded salary package 19
Slide 24: Cost / income ratio
Cost / income ratio* Jun Jun % 2001 2000 AIB Bank 51 53 - Republic of Ireland 51 52 - Northern Ireland & Britain 53 55 Capital Markets 56 56 USA 62 58 Poland 80 65 * tangible (excluding goodwill amortisation) 20
Slide 25: Asset quality
Asset quality Jun Jun % 2001 2000 NPLs / loans 1.9 1.9 Bad debts charge / average loans 0.28 0.34 Provisions / NPLs 99 98 Use of group provisions in Poland Specific charge only 0.16% (excluding Poland) Allfirst NPAs down $21m to 0.82% (US GAAP basis) 21
Slide 26: Provisions for bad debts
Provisions for bad debts Jun 00 Average Jun 01 Average €m Loans % €m Loans % 28 0.27 AIB Bank 32 0.27 18 0.29 USA 20 0.30 11 0.34 Capital Markets 10 0.26 13 1.02 Poland 5 0.31 70 0.34 Total 67 0.28 22
Slide 27: Balance sheet / capital ratios
Balance sheet / capital ratios Jun €m Jun Constant Currency 2000 Assets: 2001 Change % 42,825 Loans to customers 49,636 4 46,499 Customer accounts 52,479 3 74,687 Total assets 87,895 5 % Capital Ratios: % 5.4 Ordinary equity to assets 5.6 6.5 Tier 1 7.4 11.3 Total 11.8 23
Slide 28: Summary
Summary Leverage franchise to deliver shareholder expectations - consistent EPS and RoE performance - customer driven revenues / productivity - investing for the future - asset quality through economic cycles 24
Slide 29: Slide 29
Slide 30: AIB Bank profit statement
AIB Bank profit statement Jun Jun Change 2000 €m 2001 % 502 Net interest income 569 13 243 Other income 259 7 745 Total operating income 828 11 394 Operating expenses 426 8 351 Operating surplus 402 15 28 Provisions 32 14 323 Operating profit 370 15 - Property disposal 2 323 Profit before taxation 3
Slide 31: USA profit statement
USA profit statement Jun Jun Change 2000 €m 2001 % 261 Net interest income 287 10 171 Other income 209 23 432 Total income 496 15 253 Operating costs 306 21 179 Operating surplus 190 6 18 Provisions 20 9 161 Operating profit 170 6 3 Income from associates - 164 Profit before taxation 170 4 26
Slide 32: Capital Markets profit statement
Capital Markets profit statement Jun Jun Change 2000 €m 2001 % 79 Net interest income 55 (31) 145 Other income 186 29 224 Total income 241 8 124 Operating costs 134 8 100 Operating surplus 107 7 11 Provisions 8 (32) 89 Operating profit 99 12 1 Income from associates 2 90 Profit before taxation 101 1
Slide 33: Poland profit statement
Poland profit statement Jun Jun Change 2000 €m 2001 % 122 Net interest income 134 10 69 Other income 73 6 191 Total operating income 207 8 136 Operating expenses 177 30 55 Operating surplus 30 (46) 12 Provisions 5 (59) 43 Operating profit 25 (42) 2 Property disposal 1 45 Profit before taxation 26 (4
Slide 34: Poland Division relative to BZWBK
Poland Division relative to BZWBK H1 Jun 2001 PLN €m BZWBK (legal entity Polish GAAP) 117 32 Use of provisions created on acquisition 22 Goodwill amortisation re BZ (12) Other adjustments * (16) Poland division 26 * includes capital adjustment, consolidation of subsidiaries and alignment with Group
Slide 35: Non-performing loans by division
Non-performing loans by division As at December 31, 2000 As at June 30, 2001 NPLs/ Total NPLs/ Total Actual Provisions/ Actual Provisions/ NPLs Advances NPLs NPLs Advances NPLs €m % % €m % % 232 1.0 125 AIB Bank 253 1.0 124 87 USA - €m 82 81 0.7 205 - US$m 70 0.6 241 29 0.4 262 Capital Markets 25 0.
Slide 36: Return on risk weighted assets
Return on risk weighted assets Return % Average RWA (bn) 3.0 70 60 50 2.0 40 30 1.0 20 1.69 1.61 10 1.63 1.61 1.74 1.96 1.78 0.0 0 1995 1996 1997 1998 1999 2000 H1 2001 31
Slide 37: Risk weighted assets
Risk weighted assets Jun Jun Change 2000 €m 2001 % 20,015 AIB Bank 22,728 14 19,117 USA 22,188 16 12,696 Capital Markets 16,747 32 3,063 Poland 4,164 36 277 Group 284 2 55,168 66,111 20 32
Slide 38: Irish economic outlook
Irish economic outlook Forecast Forecast Growth % 2000 2001 2002 Real GDP 11.5 7.0 7.0 Domestic demand 9.7 6.0 5.8 Unemployment rate 4.2 3.8 4.0 Inflation (average) 5.3 4.5 3.5 Source: AIB Chief Economist, Group Treasury Both internal and external factors slowing economy Inflation pressures to e
Slide 39: Contacts
Contacts Our Investor Relations Department will be happy to facilitate your requests for any further information Alan Kelly alan.j.kelly@aib.ie +353-1-6412162 Conor Herlihy conor.v.herlihy@aib.ie +353-1-6414191 Pat Clarke patricia.m.clarke@aib.ie +353-1-6412381 353-1-660 0311 353-1-641 2075 Vi
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