AIB Group reported a rise in profits in 2022, with the bank now proposing a 79pc increase in cash distributions to shareholders.
ccording to annual results from the bank, profit after tax was €765m in 2022, up from €645m in 2022.
Following this performance, the bank, which is 57pc state owned, is recommending €381m of dividends and buybacks. This marked an increase of 79pc from last year, representing a 50pc pay-out ratio.
This includes an ordinary dividend of €166m, as well as a €215m share buyback.
Total income was up by 21pc to €2.895m across the year. This growth includes a 20pc boost in net interest income, with a particularly strong fourth quarter, due to rising interest rates and higher loan volumes.
Other income was up by 25pc to €736m, including €62m related to a forward contract for the acquisition of Ulster Bank’s corporate and commercial loans.
At the end of 2022, €2.1bn of Ulster Bank corporate and commercial loans were officially transferred to AIB, with the transfer of the remaining loans included in AIB’s acquisition of Ulster Bank assets set to be largely completed by the first half of 2023.
Total new lending was up 22pc to €12.6bn across the year, with a strong second half. New mortgage lending was €4.5bn, an increase of 53pc from 2021 levels.
AIB now holds almost a third of the Irish mortgage market.
The lender also opened around 450,000 new bank accounts as KBC and Ulster Bank continued their phased withdrawals from the Irish market.
Costs for the year were over €1.6bn, up 8pc. This increase was attributed to the impact of inflation, as well as the cost to onboard new customers. The bank also highlighted higher depreciation which was partially offset by cost savings.
There was a net credit impairment charge of €7m last year due to a €309m write back in the first half of 2022 being offset by a €316m charge in the second half. This charge was driven by the potential impact from inflationary and interest rate risks.
Strong growth is forecast for 2023, the bank reported. It added that inflation appears to have peaked.
The group has also recorded a good start to the year, with positive momentum in income.
“Despite high levels of volatility in the global environment, the Irish economy performed well and remains on track to record further growth in 2023,” chief executive Colin Hunt said.