(Bloomberg) -- AIB Group Plc is shedding about 300 jobs, moving to cut costs as it struggles with a “challenging” interest rate environment.
The bank plans to end 2019 with fewer than 9,500 staff, it said in a trading statement on Tuesday in Dublin. At the end of June, about 9,830 people worked at the bank. AIB Chief Executive Officer Colin Hunt's plans include removing layers on management, it said.
The bank was planning a new round of job cuts, Bloomberg News reported in September. Irish banks have been hit by a range of forces, from the ECB's “lower for longer” interest rate policy to a mortgage overcharging scandal and concerns around Brexit.
AIB's net interest margin fell 11 basis points to 2.32% in the third quater from the end of June, while the lender now expects a NIM below 2.4% for 2019.
The lower NIM was “disappointing,” Goodbody analyst Eamonn Hughes said in a research note, calling the third-quarter figures a “mixed” report.
AIB shares fell as much as 3.4% in Dublin to 2.95 euros, and traded at 3.04 euros at 8:59 a.m. in Dublin.
The company also said:
- AIB's fully loaded CET1 ratio was 16.5% at the end of September; bank expects it to fall to about 16% by year end
- New mortgage lending increased 9%
- NPLs fell to less than 6% of gross loans
To contact the reporter on this story: Peter Flanagan in Dublin at pflanagan23@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Dara Doyle
©2019 Bloomberg L.P.
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