‘On target’ AIB shares up on bad loans pledge

AIB has insisted that it is on target to ease its large burden of mortgage and corporate non-performing loans, as investors cheered its half-year figures which had no nasty surprises coming so soon after the Government raised €3.4bn from the shares sale last month.

After surging at one stage by almost 3%, AIB shares were 1% higher by the close, valuing the lender at €13.53bn and opening up a gap further with Bank of Ireland, which the market values at €7.42bn.

Shares in rival Permanent TSB pulled back some of its losses after the mortgage bank dropped 14% of its value when it disclosed this week it had fallen behind on targets to deal with its large haul of impaired home loans. Permanent, which is 75% owned by the Government, is now valued at €951.6m.