Aib Group Plc · EURONEXT:A5G
Aib — Allied Irish Banks, p.l.c. — FY2012 Earnings Presentation
27 slides from Aib's earnings presentation, 2013
Slide 1: Annual Financial Results
Annual Financial Results Allied Irish Banks, p.l.c.
Slide 2: Forward Looking Statements
Forward Looking Statements Important Notice A number of statements we will be making in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward‐looking” statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of
Slide 3: David Duffy, Chief Executive Officer
David Duffy Chief Executive Officer
Slide 4: Strategic Path to Sustainable Profitability
Strategic Path to Sustainable Profitability • Rebuilt capital base and restructured balance sheet Bank • Initiated cost reduction programmes Restructuring • Including disposals, numbers of staff reduced from c.23,200 at end 2010 to c.13,400 at end 2012 Phase 1 – • Revised strategy and changed leader
Slide 5: Execution in 2012 – Platform for 2013 Pre Provision Profit
Execution in 2012 – Platform for 2013 Pre Provision Profit • Revised strategy and organisational structure • Branch closures announced and substantially completed Restructuring • Process for 2,500 voluntary staff departures agreed, with 1,744 exits by end 2012 • Pay & benefit changes implemented acr
Slide 6: 2012 Financial Summary - Material Balance Sheet Improvement
2012 Financial Summary ‐ Material Balance Sheet Improvement 2011 vs. 2012 • Significant improvement in funding metrics: €bn Dec 11 Dec 12 % Change • LDR: Reduced 23% to 115% • Customer accounts: Up 5% to €63.6bn despite Loan to Deposit Ratio: 138% 115% È 23% announcement of closure of Isle of Man an
Slide 7: Strategic Actions Delivering NIM Recovery
Strategic Actions Delivering NIM Recovery NIM Evolution ** Average Cost of Deposits ** 2.00% 3.00% 2.50% 1.50% 2.00% 1.00% 1.50% 2009 2010* 2011* Q1 Q2 Q3 Q4 2009 2010* 2011* Q1 Q2 Q3 Q4 2012* 2012* 2012* 2012* 2012* 2012* 2012* 2012* • Net Interest Margin of 1.22%* in 2012, down from 1.40%* in • De
Slide 8: 70% Reduction in Group 2012 Provisions Charge vs. 2011
70% Reduction in Group 2012 Provisions Charge vs. 2011 Group Provisions Charge (2010 – 2012) • 2012: 70% Reduction vs. 2011 levels • Total group provisions charge 70% Reduction From FY 2011 peaked in 2011 at €8.2bn €bn €0 • Total Balance Sheet Provisions at December 2012: €16.5bn • Specific Provisio
Slide 9: Funding Position Significantly Improved
Funding Position Significantly Improved Customer Account Balances Funding from Monetary Authorities • Customer accounts increased by 5% year on year in 2012 despite the closure of offshore +5% Since Dec 2011 ‐29% Since Dec 2011 operations and deposit pricing reductions €bn €bn • c.8% increase exclud
Slide 10: Mortgage Customers in Difficulty – Path to Resolution
Mortgage Customers in Difficulty – Path to Resolution Irish Mortgage Arrears Strategy is to keep people in their homes, wherever possible, where customers prioritise their mortgage debt and co‐operate with the bank PDH mortgages represent 85% of total mortgage portfolio by number of accounts 84%
Slide 11: Customers in Difficulty – Path to Resolution (contd.)
Customers in Difficulty – Path to Resolution (contd.) Irish SME / Commercial / Corporate Arrears Strategy is to support viable businesses and protect jobs through a one customer debt management strategy which seeks to: Restore customer stability initially Restructure loans Establish a path ba
Slide 12: Bernard Byrne, Director of Personal, Business and Corporate Banking
Bernard Byrne Director of Personal, Business and Corporate Banking
Slide 13: A New Customer Focused Operating Structure
A New Customer Focused Operating Structure Delivering our customer management framework and approach across channels. Focus on value, customer needs while enhancing proactive engagement and reducing cost to serve Re‐orienting around Our best people Developing deeper Delivering superior distinct cust
Slide 14: Domestic Core Bank - Market Share 2012
Domestic Core Bank ‐ Market Share 2012 Personal Business Corporate No. 1 provider by number of customer No. 1 provider by number of customer No. 1 Bank for FDI in Ireland accounts across main product markets accounts across main products markets Market Share (# of Accounts) 2012 1 Market Share (# of
Slide 15: Leading Irish Digital Player in the Financial Services Sector
Leading Irish Digital Player in the Financial Services Sector Leading Irish Online / Mobile Bank Customer & AIB Financial Benefits • c.800k customers using mobile & online services • Increased Customer Service through greater availability and increased accuracy / reliability Customer Channel Activit
Slide 16: Outperforming on Irish SME & Mortgage Lending Targets
Outperforming on Irish SME & Mortgage Lending Targets SME Business Activity 2012 Mortgage Activity 2012 • Lending target of €3.5bn for 2012 surpassed • Largest provider of mortgages in Irish market in 2012 • €4.8bn approved in 2012, 37% ahead of target • c.46% of all mortgages in Ireland in 2012 wer
Slide 17: Paul Stanley, Acting Chief Financial Officer
Paul Stanley Acting Chief Financial Officer
Slide 18: Key Summary Financials – Operating Performance Stabilising
Key Summary Financials – Operating Performance Stabilising Income Statement • Operating loss before exceptionals of €2.8bn in 2012 Dec Dec down materially from €8.1bn in 2011 €m 2011 2012 • 2012 Provisions of €2.5bn ‐ down €5.6bn on 2011 Net Interest Income (before ELG) 1,838 1,494 ELG Fees (488) (3
Slide 19: Margins Improving & Cost Efficiencies Progressing for 2013 Delivery
Margins Improving & Cost Efficiencies Progressing for 2013 Delivery Total Operating Income (€m) Operating Costs (€m) €2,000 1800 €1,800 1,788 Interest Other Income 1,641* 1,659* 1600 €1,600 1,424 1400 €1,400 438 1200 €1,200 318 1000 €1,000 800 €800 1,350 600 €600 1,106 400 €400 €200 200 €0 0 2011 20
Slide 20: Funding - Improved Position in 2012
Funding ‐ Improved Position in 2012 Funding €bn Customer Accounts 140 129 • Customer account volumes increased by €2.9bn in 2012; steady growth 116 across major franchises despite the announcement of the closure of certain 120 offshore businesses •Customer accounts are the largest source of funding
Slide 21: Capital Ratios Remain Comfortably Above Minimum Requirements
Capital Ratios Remain Comfortably Above Minimum Requirements Capital €bn 25% Capital 20.5% •Core Tier 1 ratio of 15.1%, 20% 17.9% 17.6% comfortably above Central Bank 15.1% 15% minimum target level of 10.5% Total Capital 9.2% Core Tier 1 •Total Capital ratio of 17.6% 10% •Pro forma Basel III fully l
Slide 22: Peter Rossiter, Chief Risk Officer
Peter Rossiter Chief Risk Officer
Slide 23: Loan Book Composition and Credit Profile
Loan Book Composition and Credit Profile Components Credit Profile €bn 45 Total Gross Loans €89.9bn 40.0 41.8 42.6 €20.4bn 40 7.0 23% Residential Mortgages 8.2 35 8.9 Other Personal 6.2 30 6.8 6.3 Watch* Property & Construction €22.3bn 25 €42.5bn Vulnerable* 25% €4.7bn 47% SME/Corporate 5% 20 Impair
Slide 24: Customer Loan Book – Impairment and Provisioning
Customer Loan Book – Impairment and Provisioning Loan Book Land & Investment SME / Other Sectoral Profile ‐ December 2012 ROI Mortgages UK Mortgages Personal Corporate Total Development Property Commercial* Amount in €bn's Advances 39.5 3.0 6.4 14.9 16.2 4.7 5.2 90.0 Impaired 7.9 0.3 5.5 8.0 5.5 1.4
Slide 25: Mortgages – largest sector exposure at €42.5bn – December 2012
Mortgages – largest sector exposure at €42.5bn – December 2012 Republic of Ireland Mortgages - €39.5bn Republic of Ireland - €39.5bn •Owner Occupier: €31.6bn (80% by value of total 42% portfolio / 85% by number of accounts) •Buy‐to‐Let: €7.9bn (20% by value of total portfolio / 46% 15% by number of
Slide 26: Republic of Ireland mortgages – Credit Quality as at December 2012
Republic of Ireland mortgages – Credit Quality as at December 2012 Owner Occupier - €31.6bn Buy To Let - €7.9bn 14% 42% 5% 53% 81% 5% Neither past due nor impaired Neither past due nor impaired Past due but not impaired Past due but not impaired Impaired Impaired • 81% of Republic of Ireland owner o
Slide 27: Restructuring Progress Achieved But Focused on Future Priorities
Restructuring Progress Achieved But Focused on Future Priorities Net Interest Margin Evolution** Group Provisions Charge (2010 – 2012) Group Priorities 70% Reduction From FY 2011 2.00% • Meet / exceed Central Bank targets €0 for arrears in 2013 and beyond -€2 • Meet / exceed lending targets in key 1
Allied Irish Banks, p.l.c. — FY2012 Earnings Presentation on 6ix