AIB, one of Ireland’s largest banks, has reported a record pre-tax profit of €2.7 billion (£2.2bn) for 2024, marking a 13% increase compared to the previous year.
The strong performance is attributed to higher interest rates, robust mortgage lending, and limited competition in the Irish banking sector.
The Irish government still owns a 12% stake in AIB, a remnant of the multi-billion-euro bailout it received during the 2008 financial crisis.
However, AIB’s chief executive, Colin Hunt, has stated that the bank now has “a clear path” towards full private ownership in 2025.
This follows a broader move by the Irish government to gradually sell off its stakes in major banks. In recent years, the state has significantly reduced its shareholding in AIB, which was once as high as 99% after the bailout.
AIB’s main competitor, Bank of Ireland, also posted strong earnings, with an annual pre-tax profit of €1.9bn (£1.6bn) last week.
Both banks have benefitted from rising interest rates, a strong domestic economy, and a limited number of competitors following the exit of Ulster Bank and KBC from the Irish market.
AIB reported a 14% increase in new mortgage lending, reaching €4.5bn (£3.8bn) in 2024. The bank now holds a 36% share of the mortgage market, reflecting strong demand for home loans despite ongoing concerns over housing affordability and supply shortages in Ireland.
While AIB’s Irish operations thrived, its UK division faced challenges. The bank, which has seven branches in Northern Ireland, saw a 40% decline in UK profits, falling from £197m to £116m.
This was primarily due to an increase in bad loan provisions, with impairment charges more than doubling from £33m to £76m. The UK banking sector has been facing economic uncertainty, high inflation, and rising default risks, impacting lenders’ financial performance.
