Coronavirus prompts AIB to cancel London unveiling of strategic vision

AIB has cancelled a planned London unveiling of its chief executive's strategic vision for the lender on Friday in favour of hosting the event for analysts at its Dublin headquarters. The move follows an increase in the number of businesses stopping non-essential travel to help prevent the spread of coronavirus.

“In light of ongoing health concerns regarding Covid-19, we will hold AIB Group Plc annual financial results 2019 and investor update in our offices in Dublin rather than in London on 6th March,” the company has informed analysts in a note seen by The Irish Times.

“We apologies for the late change but feel it is a prudent decision in the context of current uncertainty,” it said, noting that analysts will also be able to join the event via webcast and by conference call as normal.

The venue switch comes as companies globally work on protocols to avoid spread of the disease, and as they advance contingency arrangements to deal with the event of a widespread outbreak.

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AIB chief executive of 12 months Colin Hunt will outline his medium-term vision for the bank on Friday, with the company also expected to report that its earnings dropped in 2019 in line with the wider sector as it dealt with ultra-low interest rates and muted loan book growth as banks as households and businesses fretted about Brexit.

Job losses

Analysts expect AIB’s new three-year strategy to include cost savings, including job cuts, as well as the setting of general targets for a return of excess capital to shareholders, led by the State, which owns 71 per cent of the bank.

Davy analyst Stephen Lyons said in a note to clients on Monday the AIB would be unlikely to set a target for return on tangible equity (Rote) - a key gauge of profitability relative to shareholders' equity in a company - as the macro-economic climate remains uncertain for this year.

“Instead, beyond 2020 guidance, granularity is likely to be limited to the more controllable objectives of cost efficiency and significant non-performing loan reduction alongside parameters for capital return,” he said.

Mr Lyons highlighted that the bank has already indicated that its staff count will fall by more than 300 to about 9,500 by the end of 2019 and that it would decline further to below 9,000 over time.

Still, analysts estimate that AIB will point towards a 10 per cent Rote objective to be achieved over the long term. Bank of Ireland last week abandoned its aim to hit a 10 per cent Rote ratio in 2021, even though it continues to strive to meet this level over time.