State-owned Allied Irish Banks has announced a return to pre-provision operating profit with losses before tax down €2bn to €1.7bn last year.
The bank’s annual results for 2013 revealed a pre-provision operating profit of €445m, €769m higher than in 2012.
It reported total operating income up 34% to €1.9bn.
The bank, which is 99% owned by the Irish state, said it had seen a €2bn improvement in its underlying performance and the Government has indicated it will open talks this year on converting its preference shareholding into equity.
AIB said its total impaired loans, together with past due but not impaired loans, fell by €1bn over the course of last year.
Chief executive David Duffy said the results were continued evidence of the positive impact of the bank’s revised strategy on operating performance.
“2013 was a year of steady progress at AIB as we implemented our strategic objectives which saw the bank return to pre-provision, pre-exceptional, operating profit for the year,” he said.
“A number of important milestones have been reached and the fundamentals of AIB’s performance are now trending more positively both from an operational and economic perspective.”
Mr Duffy added: “We remain focused on sustainable growth and returning to profitability during 2014. Notwithstanding the ongoing challenges facing the bank, we are more optimistic for the outlook of both the bank and the Irish economy.”
The results are further signs of significant improvements in the bailed-out banking sector here.
They come two days after Bank of Ireland reported an underlying pre-tax loss of €569m for last year, down from almost €1.5bn in the previous year.
The bank was also the subject of a massive gamble by North American investors Wilbur Ross and Prem Watsa over the last few years after they sold off part of a stake in the bank yesterday
They bought in with an investment of about €1bn as the financial crisis peaked in early 2011, staving off further state bailout. The share price was about 10 cents at the time and closed at 33 cents on the back of the deal.
The investors earned about €690m on the deal.
The Government invested almost €21bn in AIB from 2009 – including €3.5bn of preference shares - resulting in the state owning 99.8% of the bank.
Davy stockbrokers said AIB’s returns for last year have set a solid platform for market re-engagement and said the bank is now looking at the real but challenging prospect of hitting full year profits in 2014.