AIB 'delivering in cutting mortgage rates'

AIB said it’s delivering in cutting mortgage rates and was confident its provisioning for bad loans and its accounts were up to scratch after a whistleblower approached regulators.

The allegations of the AIB whistleblower were first aired last month after regulators were approached about issues over the way the lender allegedly dealt with corporate loans in arrears.

The claims raised concerns about the process of supervisory oversight by external regulators.

However, Richard Pym, the bank’s’ chairman, told shareholders yesterday AIB was confident about its provisioning procedures.

“Some questions have been raised in the media on the accuracy of our reporting of non-performing loans and provisions as included in the financial statements,” Mr Pym said.

“These have been comprehensively reviewed by management and auditors and we are entirely satisfied that the accounts are accurate,” he said.

The whistleblower had approached outside regulators, but the lender had no concerns about its internal whistleblowing system.

In its update, AIB said it had further boosted profitability, with its net margin rising to 2.09% in the first quarter.

It looked forward to paying down its costly €1.6bn of so-called contingent capital, or CoCo, notes later this summer. Its core tier one capital ratio rose slightly to 13.1%.

Significantly, new lending increased 17%, while bad loans were down by €1bn, though remaining at an elevated level of €12bn.

“The good news is your bank is doing very well,” Mr Pym told a shareholders’ meeting, which attracted the smallest gathering for an AIB agm in many years.

Cantor Fitzgerald Ireland said the results were “good” and showed increased lending and a lower level of non-performing loans.

Bernard Byrne, chief executive, robustly defended the bank from claims by some shareholders it was still charging too much for its home loans.

The bank had led rivals in announcing cuts to its standard variable mortgage rates, he told reporters. The Irish market was “catching up” with rates charged by fellow eurozone lenders. EBS and Haven would make “separate announcements”, he said.

The AIB units had not cut their mortgage loan aggressively. Mr Byrne said rates Irish SMEs are charged for their loans are not directly comparable to others in the eurozone because Irish SMEs tended to be comparatively smaller.

Shareholders praised the late Niall Murphy, a veteran shareholder who had vociferously questioned AIB directors over many years.