All eyes on AIB’s 2014 annual results

As the corporate results season gets into full swing, the spotlight this week will be on AIB with the lender due to publish its 2014 annual results on Thursday.

Broadly, markets will be hoping for a line of sight in relation to the possibility of the bank returning any capital to the State by means of a partial sale of its stake. The State, via the National Pensions Reserve Fund Commission, holds a 99.8 per cent stake in the lender.

In January, the Government appointed Goldman Sachs to advise AIB on how best to reconfigure its capital structure in advance of a possible sell-off, but the timing of such an eventuality remains uncertain.

Traders will also be watching closely for white smoke relating to any impending announcement of a successor to outgoing chief executive David Duffy, though they may be kept waiting on this issue for some little time yet.

In terms of hard financials, traders will be keen to ascertain whether the bank’s operating profit has continued its upward trajectory. Also, net interest margin – a gauge of its profitability on loans – will be watched with interest. Other key full-year measures to look out for include the number of accounts in mortgage arrears and the level of impaired loans, both of which decreased in the first half of the financial year.

It will also be interesting to see if AIB’s lending approval levels continued to rise.