M&T profits up by $87m

FIRST quarter profits at M&T Bank – the New York-based institution in which AIB holds a 23% stake – grew by $87 million (€64.5m), on an annualised basis, to $151m, helped by a lowering in lending costs.

The net income total, for the three months to the end of March, compared favourably to a profit of $64m for the corresponding quarter last year and was up from a profit of $137m for the preceding three months.

AIB is set to sell its stake in the American bank this year, as part of its post- NAMA recapitalisation efforts, which call for the bank to raise €7.4 billion in new capital by early next year.

That target will also be met by AIB shedding non- Irish-based banking business.

It is also set to sell its British-based operations (including the First Trust retail bank) and its majority (70%+) stakeholding in leading Polish bank, Bank Zachodni.

The bank is also keeping an open mind on its other capital-raising options, such as a possible rights issue and introducing a strategic investment partner.

AIB’s share price was up by over 3% – or 5c – yesterday at €1.55, on the back of the good news from its US investment.

The bank’s share price had, in earlier trading, been up by as much as 5.3% – or 8c – at €1.58.

In its results update, M&T also said that provision for credit losses – or the amount it put aside to cover loans which were unlikely to be repaid – continued to fall during the first quarter of this year.

The first quarter provision amounted to $105m, down from $158m for the same period last year and from $145m from the fourth quarter of last year.