M&T profits up by €109m

AIB’s chances of offloading its 23% stake in US bank, M&T were done no harm yesterday, with the New York-based company announcing a near $140 million (€109m) year-on-year increase in second quarter profits.

AIB is hopeful of selling its interest in M&T — an asset which could fetch up to €2bn for the bank — as part of its efforts to reach its €7.4bn end-of-year post-NAMA recapitalisation targets.

M&T has a market capitalisation of over $10bn. It generated net income/ profit of $188.8m for the three months to the end of June, according to the latest figures published yesterday. This compared to $51.2m for the same quarter last year and was up from $150.9m for the first quarter of this year.

Chief financial officer Rene Jones said the results were strong.

“Performance metrics — including net interest margin, the efficiency ratio, credit costs and our capital position — all improved during the quarter. At the same time, we strengthened our tangible common equity ratio to 5.75% from 5.43% at the end of the first quarter,” he added.

Yesterday’s figures also showed a year-on-year jump from 36c to $1.46 in second quarter earnings per shares.

On the back of M&T’s good second quarter showing, AIB’s share price rose 2.8% to 88c, having been up 3.5% earlier.

Meanwhile, AIB has reportedly hired international management consultancy Bain & Co to advise on how to merge its investment management, private banking and pension businesses as part of cost-cutting measures — although the bank declined to comment on speculation.