US-based M&T Bank, in which AIB has a 23.5 per cent stake, has reported a 10 per cent rise in after-tax profits to $210 million, (€168 million) up from $191 million in the third quarter of 2005.

Diluted earnings per share (eps) for the third quarter of 2006 were $1.85, up 13 per cent from $1.64 in the same period in 2005.

The bank, which is based in Buffalo, New York, said the results reflected the impact of its June 30th acquisition of 21 branches in Buffalo and Rochester from Citibank. Net income and diluted eps were reduced by about $5 million and $0.04 respectively as a result of the transaction.

M&T said it recorded a $13 million gain in the quarter, resulting from the accelerated recognition of a purchase accounting premium related to the call of a $200 million Federal Home Loan Bank of Atlanta borrowing assumed in a previous acquisition.

The third-quarter results also reflected a $3 million reduction of income tax expense related to the favourable settlement of refund claims originally filed by Allfirst prior to its acquisition by M&T in April 2003. The bank also made an $18 million tax deductible contribution to the M&T Charitable Foundation, a tax exempt private charitable foundation.

However, M&T said these events had no significant impact on earnings during the quarter.

During the three-month period, M&T said its provision for credit losses and net charge-offs for bad loans fell. Provision for credit losses came to $17 million, down from $22 million in the third quarter of 2005. Net charge-offs of loans in the third quarter of 2006 were $17 million, down from $22 million for the same period in the previous year.

For the nine months to September 30th, 2006, GAAP-basis diluted eps rose 11 per cent to $5.49 from $4.95 in the same quarter in 2005. Net income for the three quarters of 2006 came to $626 million, up 8 per cent from the $577 million earned in the corresponding 2005 period.