Goodbody Stockbrokers has cut its forecasts for its parent company, Allied Irish Banks, although the broker still believes AIB will produce single-digit profit and earnings growth in the current year and next year.

The cut in the 2001 profits forecast from €1.38 billion to €1.36 billion is relatively modest and largely reflects the impact of weak equity markets on the bancassurance and asset management activities. But for 2002, Goodbody expects a more substantial downturn with its existing €1.55 billion profit forecasts falling by more than €100 million to €1.45 billion.

For 2003, Goodbody had reduced its €1.73 billion forecast to €1.65 billion. The sharp cut in the 2002 profits forecast assumes slower loan growth in all AIB's markets, particularly the US and Ireland, together with higher credit costs.