Latest set of results show bank is moving in the right direction

AIB faces a number of challenges over the next few years if it is to once again become a normal functioning bank that is able to transmit credit to the wider economy. It is by no means certain that this is possible, but the latest set of results show it is moving in the right direction.

The bank, which is 99.8% owned by the taxpayer, has to work through €8.5bn in impaired mortgages over the next few years. Getting a handle on the size of the losses will determine whether the bank needs more capital and what its prospects are of returning to the private fold.

Like all banks in this country it is paying for past sins. None more so than its tracker mortgage book which is over €17bn. These type of mortgages are mostly loss making because the interest rate is very often less than the cost of funding.