AIB's net profit fell 16% to €927 million in the first half of 2025, mainly due to lower interest rates from the European Central Bank.
The main reason for the dip was a 10% drop in net interest income (NII), which fell to €1.87 billion and also because the margin AIB makes on its loans has lessened since the ECB reduced rates from 4% to 2% last year.
Even though AIB's income was under strain, there was still a lot of demand for loans, new lending went up by €600 million to €6.9 billion, thanks to more mortgages, corporate loans and personal loans.
According to CEO Colin Hunt, the bank is still doing well despite uncertainty across the world, and he also applauded the Irish economy for being strong enough to support lending activities.
The bank's return on tangible equity was 21%, and it issued a €263 million interim dividend, its first such payment since the financial crisis.
At the same time, operating costs went up by 3% to €979 million because of inflation and more money being spent on operations.
A 2% drop in full-time employees to 10,375 people helped make up for some of this.
Income from sources other than interest also went down, dropping 9% to €358 million.
The bank made more money from fees and commissions, but this was mostly cancelled out by lower returns on equity investments.
AIB set aside €85 million for loan losses, up from €61 million a year earlier, which shows that they are being careful about credit risk in the current situation.
It plans to make more than €3.6 billion in net interest income in 2025.
This comprises a €15 billion structural hedge program and €2.2 billion in new investment securities.
The bank has also made its hybrid work rules stricter; eligible staff will have to go back to the office three days a week, which is the tightest policy of any of Ireland's main retail banks.
At the end of 2024, AIB had more than 10,400 employees.
In early 2022, they started hybrid working, which meant that employees had to be in the office at least two days a week, depending on their role.
The Irish government sold its last 2% interest in AIB for €305 million, almost finishing its sale of assets after the financial crisis.
This puts the total amount of money the State has recovered to €19.8 billion, which is only €700 million less than the original €20.8 billion bailout.
The government is anticipated to sell the last of its warrants to make up the difference.
See More: AIB, Banking, Colin Hunt
