AIB chief executive Colin Hunt. Photo: Steve Humphreys
AIB has upgraded the outlook for its full year Net Interest Income (NII) as European Central Banks settle at 2pc.
The bank had seen a sharp drop in interest income in the first nine months of this year. The bank published financial results for the first nine months of the year on Tuesday.
It recorded net interest income of €2.80bn in the nine months to September, down 10pc on the same period last year.
A drop was expected as banks deal with the reduction of interest rates by the European Central Bank (ECB) this year.
Net interest margin (NII) is a key measure for banks that reflects the gap between what it pays to borrow, including from savers, and what it charges customers.
For 2025 AIB said it expects NII of greater that €3.7bn, upgraded from previous guidance of income greater than €3.6bn. The change reflects an expectation that the ECB rate will now stay at 2pc for the rest of this year and the Bank of England will keep its rates at 3.75pc.
The bank’s other income decreased 12pc on the equivalent prior year period as the prior period benefitted from higher equity gains and other items.
Net fee and commission income grew by 2pc. For 2025 non interest income is expected to be around €750m.
AIB said its new mortgage lending in Ireland was broadly stable at €3.1bn and reflected a market share of 31pc in the nine-months.
Personal lending in Ireland was up 4pc to €1.1bn
Across all segments of the bank green and transition lending accounted for 36pc of new lending.
AIB’s Chief Executive Officer, Colin Hunt, said the strong quarter for AIB was underpinned by a supportive Irish economy and market-leading customer franchise.
“Net interest income has remained resilient throughout the interest rate cycle due to the growth in our loan book and deposit base,” he said.
“The Irish economy continues to show resilience despite a challenging international backdrop. Our 3.4 million customer base positions us well for the remainder of the year and for the medium term. We continue to implement our strategy at pace, delivering sustainable returns to our shareholders, and supporting our customers and communities.”
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