AIB half-year results show an increase in profit to €1.1bn after tax on income of €2.47bn and guidance for the full year is revised upwards to €4bn.

The bank's main revenue source is Net Interest Income (NII) which increased by 18% compared with the first half of 2023 to €2.075bn.

This is due to what the bank describes as a higher interest rate environment and higher average customer loan volumes.

This is expected to be €4bn for the full year based on an ECB deposit rate of 3.25%, revised up from €3.65bn which was based on an ECB deposit rate forecast of €2.75%.

Ulster bank loans

Other income for the period is €395m, the main elements of which are €138m in relation to a forward contract for the acquisition of Ulster bank loans and fee and commission income of €336m. New mortgage lending was up 10% to €1.9bn giving AIB a 36.4% share of the Irish mortgage market, while total new lending was 13% higher at €6.3bn.

AIM operating costs increased by 6% to €947m due to an increase in staff numbers, inflation and what the bank describe as enhanced employee benefits.

Bank levies and regulatory charges increased by €21m to 128m for the period with the cost for the full year expected to be €145m.

The bank also announced that for the first time since the financial crash it was in a position to announce “a mid-year distribution and discussions underway with the Department of Finance for a €500m directed share buyback, which would bring payments to the State to €3bn so far this year.”