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Noonan aims to recoup AIB cash

The Government and the boss of Allied Irish Banks have committed to recouping the nearly 21 billion euro pumped in to rescue it at the height of the recession.

With the lender revealing profits of 1.1 billion euro for last year - a return to money-making for the first time since 2008 - Finance Minister Michael Noonan and the bank's chief executive David Duffy committed to repaying the bailout.

AIB reported losses for 2013 of 1.7 billion euro before the turnaround in fortunes.

Mr Noonan did not commit to a time-frame for selling part or all of the state's 99% stake in the bank but it is expected some form of sale, possibly a minority holding, will take place next year.

"The strong results announced by AIB today are very encouraging and demonstrate the significant progress made in returning the bank to a position of strength," he said.

"AIB is becoming an increasingly valuable asset and today's results put the taxpayer in a strong position to regain the 20.8 billion euro investment in the bank. Our attention now turns to the process of examining the range of options available to recoup this investment for the taxpayer."

AIB has also offered to pay a 280 million euro dividend for the state's shareholding in May.

Mr Noonan added: "While our focus is currently on restructuring the bank's capital base, this is just the start of the process. All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions."

The strong AIB performance follows the turnaround in fortunes for both Bank of Ireland and Ulster Bank, both of which announced a return to profits last month.

AIB's results for 2014 showed a 23% fall in the number of impaired loans on its books over the year and the number of owner occupier mortgages in Ireland in arrears was down by 22%.

The bank said it had 36,000 solutions in place for people in arrears and that 9,000 cases of mortgages in arrears are in the court system.

AIB repossesed 352 homes last year, with the vast majority classed as voluntary or abandonment.

Mr Duffy, who is to leave AIB this year, said the bank was on course to begin to repay taxpayers for the multibillion-euro rescue and the first dividend is the start of that.

"Future dividends and future growth in the bank I think will ensure that the state will get back all the money that it put into AIB," he said.

AIB is considered to be worth more than 13 billion euro in today's market.

Talks with the Department of Finance on recouping the bailout money will also involve a possible significant consolidation in the number of ordinary shares in issue as the bank has more than 523 billion ordinary shares.

Mr Noonan added: "I welcome the strong growth in new lending activity which was higher across all the major sectors, in particular agriculture, manufacturing and tourism, and reflects increased demand for credit as the economic environment improves.

"AIB has also made significant progress in reducing distressed loan balances with owner occupier mortgage arrears dropping 22% and the process of restructuring the group's SME book reaching its latter stages with the majority of offered SME restructures expected to complete during 2015."