By Andrew Bushe
DUBLIN — The Allied Irish Bank Group has reported pre-tax profits of _826 million for 1998, a 42 percent increase on the previous year.
The results mean it is the first Irish company to break through the billion euros profit margin.
Profits in the Republic were up 23 percent as a result of the buoyant economy with loans to customers up 21 percent and deposits up 13 percent.
The bank is embroiled in controversy for writing off debts run up by two previous taoisigh, Charles Haughey and Garret FitzGerald, and is due to be called before the Dail Committee of Public Accounts which is investigating bogus offshore accounts AIB held in the past.
Chief Executive Tom Mulcahy refused to discuss the politicians’ debts citing client confidentiality and an instruction from the Moriarty Tribunal, which is probing payments to Haughey.
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The bank effectively wrote off more than _450,000 of Haughey’s debts when he was taoiseach and a _200,000 debt from a failed investment in the Guinness Peat Aviation Company for FitzGerald after he had left politics.
Mulcahy was also maintaining a strict no comment stance on recent
takeover rumors which have resulted in share price gyrations.
Profits at AIB’s U.S. division, including First Maryland Bancorp,
increased by 28 percent to _200 million. Trust fees and investment
advice income went up by 55 percent.
Mulcahy said that in America, 52 core software systems running in seven banks had been converted to one platform.
“Effectively in the U.S. in the course of 1998, although the profits
are up very satisfactorily, we also created, as it were, a new bank,” he said.
In Britain, profits were up by 26 percent and in Northern Ireland
profits increased by a more modest 15 percent.
Mulcahy described the 50 percent growth to _39 million of the Ark
Life insurance business as “colossal” for a company that wasn’t in existence 10 years ago.
He said their profits from credit cards were up over 50 percent
reflecting the health of the economy.
In Poland, where AIB owns 60 per cent of the WBK bank, profits were up 30 percent to _48 million.
The total net dividend is 25 percent higher at 22.1p.