AIB Group PLC on Wednesday reported a strong rise in annual profit, hiking its dividend by nearly 40% in response and planning a €1.2 billion share buyback.

The Dublin-based bank said pretax profit was €2.70 billion in 2024, up 13% from €2.39 billion in 2023. Profit after tax was €2.35 billion, up from €2.06 billion.

This was as net interest income increased by 7.5% to €4.13 billion from €3.84 billion, and total operating income - including fee, commission and trading income - was €4.93 billion, up 4.4% from €4.72 billion.

Additionally, impairments were reduced. The net credit impairment charge was €55 million in 2024, down from €172 million in 2023.

AIB made €14.5 billion in new loans in 2024, up 17% from €12.3 billion in 2023, increasing gross loans outstanding by 6.3% to €71.2 billion from €67.0 billion.

The bank’s CET 1 ratio, which measures its ability to withstand financial stress, edged down to 15.1% at the end of 2024 from 15.8% at the end of 2023. Both were above AIB’s medium-term target of greater than 14%.

AIB declared a final cash dividend of 36.984 euro cents per share, up 39% from 26.568 cents for 2023.

It also noted it has regulatory approval for €1.2 billion in share buybacks. This is awaiting discussions with the Irish government’s Department of Finance, AIB said.

Chief Executive Officer Colin Hunt said there is ‘a clear path to a return to full private ownership this year’, after the Irish state reduced its shareholder to 12.39% last year. He noted that AIB has returned a total of €18.5 billion to Irish taxpayers after its bailout during the financial crisis in 2008.

AIB shares were up 1.3% to 559.00 pence on Wednesday morning in London.

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