AIB close to six-year high in share value
AIB, which has operations in Britain, Poland and the US, said it expected 2005 earnings per share to be in the range of 135 to 137cent, based on new international accounting rules.
“The prospects remain bright for AIB”, chairman Dermot Gleeson said at the company’s annual general meeting in Dublin.
However, the bank’s share price dropped during the day by 40cents, or 2.5%, to €15.85, before recovering in late trading to close unchanged on the day.
Shares in AIB are close to a six year high at this stage.
Davy analyst, Emer Lang, in a video presentation to AIB shareholders at the agm said the 2004 performance had been very impressive with the domestic wings of the business performing exceptionally well.
Peter Jackson of Bloxham Stockbrokers said AIB was a good business and attractively priced at current levels.
The fact that it is operating in an economy where the growth outlook is among the best in the world is a big factor in its favour at present.
Mr Jackson said the strength in the Irish economy aided by low interest rates and low inflation suggests the shares are worth buying at current levels.
He rejects suggestions that banks in Britain offer better value.
“That is not the case at all”, he said.
Goodbody and NCB Stockbrokers have also put buy recommendations on the stock.
In his statement to shareholders, bank chairman Dermot Gleeson said the business has performed very well in the first quarter of this year.
“We continue to enjoy excellent loan growth in our Republic of Ireland, United Kingdom and International Corporate Banking activities”, Mr Gleeson said.
Analysts pointed out that despite the criticisms following foreign exchange and other scandals during 2004, when AIB was forced to pay back almost €35m in overcharging, the bank has not suffered on the markets in any real way.
Its share price is now trading at its highest in six years. This is largely down to an upbeat outlook for the Irish economy.
: Why did the bank back down from a full hearing of the Seamus Sheerin case, who was allowed to resign from the bank? - Not answered.
: In the interest of openness, is the bank prepared to disclose the settlement made with Mr Sheerin? - Not answered.
However in relation to the above questions chairman Dermot Gleeson in his opening remarks said he had gone as far as he could on the foreign exchange scandal “and other issues” in the annual report.
“There is little I can add to what I have said before on these issues other than to apologise again to you our shareholders for our failings and to reiterate the board’s and management’s determination to do our business in an efficient, compliant and ethical manner.”
: Can the bank assure shareholders that no other investigations are pending or underway that will hit its profits or damage its reputation further?
In that context Mr Gleeson was asked if he and the board would resign if another scandal broke during the current year in one of the Sunday newspapers.
Mr Gleeson was quite blunt in his response: “I don’t control what’s in Sunday newspapers. I’m not going to rest my fate on the editor of any one of the Sunday newspapers. I absolutely will not.”
He had no intention of making a pledge and risk being left to “tick over like a mouse’s heart from here to eternity.”
“Which of us has not made mistakes?
We have to be forgiving and understanding of human error,” he said.
He drew the line with systemic failures within the bank and was “unforgiving” of failure to advise of problems and difficulties in that regard.
: When will the investigation into the Faldor tax evasion scam by former top executives be concluded? - No advance on annual report.
: When will the bank decide on the future of Ark Life and what are the implications of its decision to sell on the business? - Not answered.
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