AIB profits soar to almost €4m a day

AIB recorded its biggest-ever profit last year, as the bank earned almost €4 million a day.

The annual profits of €1.37 billion came just a year after the country’s largest bank revealed that rogue trader John Rusnak had lost $691m on foreign exchange markets.

The bank’s accounts for 2002 show that in Ireland alone the bank made profits of €540m, despite a slowdown in the economy.

AIB’s retail banking division in Ireland saw operating profits rise by 11%. The bank said it has seen “exceptional” growth in banking fees and commissions.

Credit card revenues were particularly strong, as were revenues from financing and leasing.

AIBwas the largest seller of special savings incentive accounts, chief executive Michael Buckley said. Mortgage lending grew by 31% in 2002 while customer loans rose by a fifth to €3.6bn.

In Britain and Northern Ireland, profits increased by 8% for the year to €240m.

However, the US arm Allfirst saw a 13% drop in profits to €308m, hit by increasing provisions for bad debts and decreasing customer deposits.

A redundancy programme in December cost the bank €13m. In Poland, the bank’s operations recorded a 71% rise in profits to €61m.

But the bank was not holding out much hope of recovering any of the cash lost by Rusnak.

Though its legal team is still investigating whether it can recoup the losses from its insurers, Mr Buckley said that most of the money was gone.

He also ruled out trying to recoup bonuses paid to Rusnak and added that no action would be taken against its former accountants PriceWaterhouseCoopers. After the losses were discovered, PWC were replaced by KPMG.

Mr Buckley also tried to put the events of the past year behind him.

“We believe we have delivered something special given the background environment. The heart of AIB is beating strongly and we will deliver a compelling combination of growth and resilience in the coming year,” he said.

The bank’s shareholders will receive a dividend of 49c for the year, a 12% rise on 2002. However, shares didn’t react positively yesterday, closing down 10c to 12.40