AIB boss admits the bank 'made a mistake' over its no-cash plan at branches

“We got it wrong. We made a mistake,” the AIB chief executive said.

AIB boss Colin Hunt has said the bank “had made a mistake” over its now aborted plan to withdraw cash services from more of its branches.

The lender did a u-turn last week after facing a public outcry and push back from politicians on its plan to withdraw the cash services from a further 70 of its branches. Taoiseach Micheál Martin had spoken out against the proposal.

In his first comments about the row, Mr Hunt said the bank had got it wrong. 

“Customers made it clear they did not want it to happen,” he said. 

“We got it wrong. We made a mistake,” the chief executive said, adding he was not dodging responsibility for the plan.

The remarks come as the bank posted its latest earnings report.

The lender said it was in “robust financial health” and will benefit from income growth as the European Central Bank hikes interest rates.

“The structure of our balance sheet is geared towards higher interest rates,” the bank said in the earnings statement.

AIB also confirmed it has now moved ahead to strike a binding agreement to acquire 47,000 tracker mortgages in a €5.7bn loan book from Ulster Bank which is leaving the banking market in the Republic.

AIB has already started to take on customers under a separate deal done with Ulster that involves it securing €3.7bn of corporate and commercial loans.

The bank said that in the first six months of the year its total income had risen 8% to €1.3bn and had posted a net profit of €477m for the period.

New lending had increased by 20% and the amount of its non-performing loans had fallen.

The bank also highlighted its “strong funding” position after a 3% increase in customer deposits to almost €96bn, saying it may increase its financial targets “given the momentum in income which is expected to be offset to some extent by cost inflation”.

AIB, along with rivals, is set to benefit hugely from the exit of Ulster Bank and KBC Bank from the Republic.

The Competition and Consumer Protection Commission in recent months approved all three key deals involving AIB, Bank of Ireland, and Permanent TSB as they scramble to secure the loan books of Ulster Bank and KBC Bank.

Following in-depth probes, the competition watchdog had approved, in May, the plan by Bank of Ireland to secure €9bn mortgage loans from KBC, and in April, the plan of AIB to acquire €3.7bn in commercial loans from Ulster.

Last week, the watchdog passed the €7.6bn plan by Permanent TSB to acquire the non-tracker mortgage loan book and 25 branches from Ulster.

There will likely be a fourth deal that will require a watchdog investigation after AIB doubled down with Ulster to also get the tracker loans from the lender.

In the rulings, the CCPC has explicitly said it had little choice but to approve the purchases despite the concerns over competition.

That's because there were no other lenders readying to enter the market to take the place of Ulster, the No 3 general lender in the Republic, and the highly competitive mortgage bank KBC.