Bank focused on repaying state some of its €20bn next year

Management at AIB has said it hopes to be in a position to take on more private investment and to pay back some of the €20bn pumped in by the state, sometime next year.

At the publication yesterday of the bank’s annual financial results, AIB’s new chief executive, David Duffy, said management had been in discussions with potential private investors for some time and would hope to see some real investment by the end of next year. Mr Duffy hopes the second half of 2013 will see a clearer picture regarding the level of fresh investment likely to come into AIB.

However, when asked how much of the Government’s investment might be paid back, or how much of its 99% stake might be reduced, Mr Duffy said it was too early to judge.

“Our short-term ambition is not necessarily for the Government’s stake to be reduced, but we would be comfortable with that happening. Getting money back for Government and attracting long-term investors is our ultimate goal,” he said.

Importantly, though, he added that AIB is now strongly capitalised and will not need extra state funding.

The bank’s core tier-1 ratio is now one of the strongest around, at 18%, having been around 4% in 2010.

Asked about the culture he encountered in AIB, Mr Duffy said he found no surprises and is occupied with the future rather than the past. He said the new management does not believe debt forgiveness is the best option in dealing with loan arrears, something suggested last year by the former executive team.

“The challenge facing me is what I expected it to be —: complex,” Mr Duffy said, adding that the bank is aiming to rebuild a reputation as a customer-focused producer of credit.

While house repossessions rose to 51 last year — mostly voluntary cases — Mr Duffy said AIB’s aim is to keep customers in their homes.