TIDMAIBG
RNS Number : 2570G
AIB Group PLC
02 November 2018
02 November 2018
AIB Group plc - European Banking Authority (EBA) European Wide
Stress Tests 2018
CFO Comment on EBA EU Wide Stress Tests
"Our result of 11.8% fully loaded CET1 in the adverse scenario
demonstrates our high capital base and resilience. With a fully
loaded CET1 of 17.9% in September 2018, continued reduction in NPEs
and a growing loan book, the balance sheet continues to strengthen
and risk profile improves."
-Mark Bourke, CFO
Results of EBA EU Wide Stress Tests
AIB Group plc ("AIB") was subject to the 2018 EU--wide stress
test conducted by the European Banking Authority (EBA), in
cooperation with the Central Bank of Ireland (CBI), the European
Central Bank (ECB), the European Commission (EC) and the European
Systemic Risk Board (ESRB).
AIB's capital ratios and EBA stress test results are outlined
below:
AIB CET 1 Capital Ratios Sept 2018 Jan 2018 Dec 2017 Dec 2015
Post-IFRS9
------------
CET 1 - Transitional 21.6% 20.8% 20.8% 15.9%
CET 1 - Fully loaded 17.9% 17.0% 17.5% 13.0%
---------- ------------ --------- ------------
EBA Stress Test Results Stress Test Stress Test
2018 2016
---------- ------------ --------- ------------
CET 1 - Transitional adverse
scenario 14.8% 7.4%
CET 1 - Fully loaded adverse
scenario 11.8% 4.3%
---------- ------------ --------- ------------
AIB's very strong capital starting level (based on January CET1
17.0%) and our proven ability to generate capital give us
significant comfort about the overall result (CET1 11.8% in adverse
scenario). The elevated levels of NPEs and the static nature of the
test contribute to higher than average capital depletion under the
adverse scenario. No capital action is required for AIB as a result
of the EBA Stress Test Results.
The EBA stress test is based on the January 2018 static balance
sheet and does not reflect current or future improved financial
performance, which for 2018 so far includes:
-- EUR3bn reduction in NPEs (including loan portfolio sales of
EUR1.1bn) to EUR7.2bn September 2018
-- Profit before tax EUR0.8bn for the six months to end June 2018.
AIB notes the following:
-- AIB is very well capitalised with a CET1 fully loaded ratio
at September 2018 of 17.9%, well ahead of our medium term target of
13% and significantly above our SREP requirement (9.725%)[1]
-- AIB demonstrated its ability to generate and return capital
having increased its dividend by 30% to EUR326m (FY 2017) from
EUR250m (FY 2016)
-- AIB NPEs have reduced materially from EUR18bn in December
2015 to EUR10.2bn in Dec 2017, and subsequently to EUR7.2bn in Sept
2018. This represents a 77% reduction from peak NPEs.
The results published today by the EBA are point in time
projections based on prescribed stress tests methodology and should
not be treated as indicative of the future financial performance of
AIB.
To view the results including disclosure templates published by
EBA for AIB please see Appendix 1.
http://www.rns-pdf.londonstockexchange.com/rns/2570G_1-2018-11-2.pdf
For further information on AIB's performance year to date,
please click see Appendix 2 for our Q3 2018 Trading Update.
http://www.rns-pdf.londonstockexchange.com/rns/2570G_2-2018-11-2.pdf
-ENDS-
For further information, please contact:
Niamh Hore / Janet McConkey Orla Bird / Stephen O'Shea
Investor Relations Media Relations
AIB Bankcentre AIB Bankcentre
Dublin Dublin
Tel: +353-1-6411817 / +353-1-6418974 Tel: +353-1-7715375 / +353-1-7720456
email: niamh.a.hore@aib.ie email: orla.c.bird@aib.ie
janet.e.mcconkey@aib.ie stephen.p.o'shea@aib.ie
Important Information and forward-looking statements
This document should be considered with AIB's Annual Financial
Report 2017 and Half-Yearly Financial Report 2018, and all other
relevant market disclosures, copies of which can be found at the
following link: http://aib.ie/investorrelations
This document contains certain forward-looking statements with
respect to the financial condition, results of operations and
business of AIB Group and certain of the plans and objectives of
the Group. These forward-looking statements can be identified by
the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as
'aim', 'anticipate', 'target', ' expect', 'estimate', 'intend',
'plan', 'goal', 'believe', 'may', 'could', 'will', 'seek',
'continue', 'should', 'assume', or other words of similar meaning.
Examples of forward-looking statements include, among others,
statements regarding the Group's future financial position, capital
structure, Government shareholding in the Group, income growth,
loan losses, business strategy, projected costs, capital ratios,
estimates of capital expenditures, and plans and objectives for
future operations. Because such statements are inherently subject
to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking
information. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. These are set out in the 'Principal risks and
uncertainties' on pages 58 to 68 of the Annual Financial Report
2017 and on page 32 'Update on risk management and governance' of
the Half-Yearly Financial Report 2018. In addition to matters
relating to the Group's business, future performance will be
impacted by Irish, UK and wider European and global economic and
financial market considerations. Any forward-looking statements
made by or on behalf of the Group speak only as of the date they
are made. The Group cautions that the list of important factors on
pages 58 to 68 of the Annual Financial Report 2017 and on page 32
of the Half-Yearly Financial Report 2018 is not exhaustive.
Investors and others should carefully consider the foregoing
factors and other uncertainties and events when making an
investment decision based on any forward-looking statement.
[1] FY 2018 SREP is 9.725%; SREP requirement does not include
Pillar 2 Guidance (P2G).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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