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Irish bank cuts mortgage rates

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
07/08/2015

Borrowers in the Republic of Ireland who have a mortgage with Allied Irish Banks (AIB) are to benefit from a rate cut.

The bank was bailed out by the Irish government in 2009 are remains 99.8% owned by the taxpayer.

However, recent improved performance has boosted pre-tax profits to €1.2bn (£844m), an increase of €800m (£563m) compared to the same period in 2014.

This has prompted the lender to cut its standard variable mortgage rate by 0.25% to 3.65%. This rate applies to both new and existing customers and will come into effect in October.

The bank estimates that a customer with a €200,000 (£141,000) mortgage will save around €325 (£229) a year.

Customers with the Haven brand will see their rate fall to 3.72% and at EBS to 3.7%.

The bank announced in its annual results that lending approvals had grown 21% in the last year

Chief executive Bernard Byrne said: “In the first half of 2015 we continued to execute our strategy to transform the group and as a result we improved our underlying performance alongside the significant net provision writebacks and other additional gains.

“We also strengthened our balance sheet and reduced risk by further significant reduction in impaired loans. We remain focused on delivering a bank with market leading capital returns and a clear and transparent risk profile.”

Chairman Richard Pym added: “These results are extremely encouraging and reflect the support of our customers, the efforts of our staff and the recovering national economy.

“The financial outcome for the half-year is significantly ahead of the expectations we had at the beginning of the year and reinforces our endeavours to see all of the €20.8bn invested in AIB by Irish taxpayers repaid.

“Whilst any decision on a future sale of AIB is entirely one for the Irish Government, the results so far this year significantly improve the prospects for a successful transaction whenever it happens.”


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