AIB Group plc swings to a pre-tax loss of £805 million in 2020

Written by: Wajeeh Khan
March 5, 2021
  • AIB Group plc swings to a pre-tax loss of £805 million in 2020.
  • The Irish lender reports £1.62 billion of net interest income.
  • AIB Group's CET 1 ratio stood at 15.6% at the end of 2020.

AIB Group plc (LON: AIBG) said on Friday that it concluded 2020 with a pre-tax loss. The company attributed its dovish full-year performance to the ongoing Coronavirus pandemic that fuelled credit losses last year. AIB, however, expressed confidence that it will return to profitability in 2021.

The COVID-19 crisis has so far infected more than 4.2 million people in the United Kingdom and caused over 124 thousand deaths. In separate news from the UK, Essentra plc resumed its dividend on Friday despite a decline in its profit and revenue.

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AIB shares, that you can learn to buy online here, tanked 2.5% on market open on Friday but gained 5% in the next hour. Including the price action, the stock is now exchanging hands at a per-share price of 168 pence. In comparison, it was trading at 142 pence per share at the start of 2021.

AIB Group reports £630 million of operating profit

The commercial bank reported £804.85 million of pre-tax loss in 2020. In comparison, it had posted £431.39 million of profit in the previous year. Expected credit loss charge, as per the Irish firm, stood at £1.26 billion in the recently concluded year, while the exceptional items related charge came in at £185.87 million.

AIB said that its operating profit registered at £630.22 million in 2020, excluding exceptional items and impairment losses. In 2019, it had recorded a much higher £940 million of operating profit. Net interest income also saw a decline in 2020 to £1.62 billion from the previous year’s £1.80 billion.

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AIB’s CET 1 ratio stood at 15.6% at the end of 2020

AIB further added on Friday that its CET 1 ratio (Common Equity Tier 1) stood at 15.6% at the end of 2020. In the previous year, its CET 1 ratio had come in at 17.3%. The lender also expressed confidence that it will resume its dividend payments later this year, despite another lockdown imposed at the start of the year that disrupted recovery.

The Dublin-headquartered company’s financial update comes on the same day when the London Stock Exchange Group plc said that its pre-tax profit jumped 5.2% in 2020.

AIB Group plc performed largely downbeat in the stock market last year with an annual decline of close to 50%. At the time of writing, the Irish commercial bank has a market cap of £4.52 billion.