AIB's mortgage share rises to more than 35% 

Growing loan book combined with high interest environment saw lender's net interest income surge by 27%

Colin Hunt, CEO AIB Group 

A "very strong" start to the year saw AIB's net interest income surge with the lender's share of new mortgage lending inching higher in the period.

In a trading statement on Thursday, AIB said its new mortgage market share increased to 35.4% from January to March. That is up from a 33% market share last year. 

The increase leaves Ireland's two largest banks, AIB and Bank of Ireland with more than a three-quarters share of the new mortgage market.

A growing loan book combined with high interest rates saw AIB's net interest income surge by 27% in the first three months of the year, with the lender's net interest margin at 3.25%.

Earlier this week, Bank of Ireland raised its net interest income guidance for 2024 amid doubts about the path of future interest rate cuts, with many forecasters now predicting the European Central Bank will be reluctant to move too quickly. 

Speaking on Tuesday, it said it expected interest rates this year to be 25 basis points higher on average across the ECB, Bank of England and Federal Reserve compared to its previous predictions.

However, AIB has reiterated its full-year forecast, with net interest income expected to exceed €3.65bn, down from last year’s €3.84bn. The bank said it assumes an ECB deposit rate of 2.75% in December 2024.

Gross loans of €68bn were up by €1bn in the first three months, primarily driven by new lending exceeding redemptions, the bank said, adding that it expected customer loans to grow by 2% in 2024. 

The bank said its total new lending of €2.8bn in the first three months was "broadly in line" with the same period last year.

"The Group had a very strong first quarter performance and, with continued momentum across our business and the embedding of our strategic priorities, we are confident in our outlook for 2024," said AIB chief executive, Colin Hunt. 

"AIB continues to be in a position of strength with a robust balance sheet, stable deposit base and growing loan book."