AIB reports 'good progress'

Allied Irish Banks continues to make good progress and expects to achieve strong constant currency profit growth in its Irish, British and Capital Markets divisions, the bank said today.

It expects its Irish operation to see an overall loan book increase of more than 20%.

Projected market growth of 16% is forecast, according to a trading statement issued today.

Both mortgage and non-mortgage lending was described as buoyant.

Home mortgage balances are expected to grow by over 30% in 2003 and this growth is being achieved without relaxing lending policies and practices, the AIB said.

Strong demand from business banking customers meant that non-mortgage lending balances were expected to increase by over 20%.

Sluggish demand for equity-linked products meant that its life and pensions division, Ark Life, was likely to see profits resembling 2002's figure.

Commenting on their Polish division's performance, AIB said it was confident that a reduction in its operating cost base will sustain positive trends and that their franchise there had 'substantial' organic growth potential in an improving economy.

Its corporate banking division was performing 'very well' with overall loan growth expected to be around 5%.

AIB also stated that its integration of Allfirst into M&T Bank in the United States was being met and that it expects the US economy to enter a strong new growth phase.