AIB warns of currency impact

Allied Irish Bank today said it expected low earnings growth this year, despite an “excellent” performance from its Irish and UK operations.

Weakening of the US dollar and sterling against the euro is expected to cause an estimated negative currency impact of 4% on its non-euro denominated activities, the group said.

Subsequently, the bank is targeting “low, single-digit growth in underlying adjusted group earnings per share in 2003”, it said in a trading update ahead of its half-year results.

However, Allied Irish said growth in its Irish and UK retail and commercial banking activities continued to be excellent.

“In both islands, we are growing faster than our competitors and we continue to target underlying, double-digit operating performance growth in these businesses,” the group said.

The bank’s capital markets division “continues to show resilience in difficult market conditions”, the bank added.

But it said its focus on doing more business with existing customers in Ireland was being reflected in increasing revenue and market share.

In the bank’s UK business, it said it was seeing buoyant demand from new and existing customers.

That was being underpinned by investment in staff and new sites, it said.

“Throughout our business, we relentlessly focus on productivity and expect to maintain a positive underlying gap between income and cost growth for the year 2003,” it added.