AIB lives up to standard with even better results

AIB Group performed its, by now, standard trick of producing better than expected figures when it released its interim results this week. The Republic's largest bank saw profits rise by 12 per cent in the first half of 2000 and is confident of repeating the performance over the year as a whole.

That the bank should be doing so well in a period of unequalled economic well-being is no surprise and it was the very increase in loans - in an environment where Irish credit growth remains stubbornly above 20 per cent - that helped underpin the results. Encouragingly, although the lion's share of profit came from domestic operations, the percentage they contributed to the overall figure fell from 45 to 42 per cent, vindicating the group's moves to diversify geographically.

However, non-interest income - fees and commissions among them - contributed as well in an increasingly competitive market where interest margins continue to be squeezed.

Not surprisingly, the bank intends to boost profits further by beefing up the contribution from such non-interest areas. What this means, among other things of course, is that we will all pay more for the privilege of banking with AIB. Not that one wants to pick on them. All Irish banking operations are looking in the same direction - either providing the same service at lower cost or charging more for service.

What was somewhat surprising in the general air of contentment surrounding the release of the figures was the apparent irritation of chief executive Tom Mulcahy at questions about the group's liability to the DIRT scandal.

Personally, it seems perfectly reasonable to me that investors in a company would wish to know the extent of a liability which, single-handedly, might account for up to a third of annual profits.