AIB increases bad debts estimate
AIB announced this evening it has increased estimates of the amount of money needed to cope with bad debts in 2009 to €4.3 billion.
In an interim trading statement released to the Irish Stock Exchange the bank said the “significant downward revisions to expectations for Irish economic activity” meant it had to increase the estimates.
“Our key macro assumptions for Ireland are now more negative than in the stress scenario presented at our results announcement. The pace of change is increasing loan impairment and bad debt charges,” the statement read.
AIB said criticised loans have increased in the first quarter to €24.3 billion, an increase of close to €9 billion.
Republic of Ireland division represents over 70 per cent of the increase and around 75 per cent of the group bad debt charge.
Mortgage arrears stand at 2 per cent of total mortgages at the end of March up from nearly 1.5 per cent in December 2008. Impaired loans have increased to €234m.
The bank said profit before bad debt provisions has been good in the year to date and up on the corresponding period in 2008.