AIB's First-Half Net Profit Falls 16% Amid Lower Interest Rates and Increased Loans

AIB's net profit fell 16% to €927 million in the first half of the year due to lower interest rates and a 10% decline in net interest income. The bank's net loan loss charge increased to €85 million, up from €61 million in the previous year. AIB announced its first interim dividend since the financial crisis, paying 12.328 cents per share or a total of €263 million.

Irish bank AIB reported a 16% drop in its net profit for the first half of the year, falling to €927 million [2]. The decline was primarily attributed to a 10% year-on-year decrease in net interest income, which amounted to €1.87 million [2]. Despite this, AIB's net loan loss charge increased to €85 million, up from €61 million in the previous year [2].

The bank's net interest income decreased due to falling interest rates, which were offset by a €400 million increase in loans to €71.6 billion [2]. Other income also fell by 9% to €358 million, as higher fee and commission income was largely offset by lower equity investment gains [2].

AIB's full-year forecast for net interest income is €3.6 billion, down from last year's €4.12 billion [2]. The bank reiterated its 2025 guidance, expecting other income to come in at about €750 million [2].

The bank announced its first interim dividend since the financial crisis, paying 12.328 cents per share or a total of €263 million [2]. Despite the challenges, AIB's chief executive Colin Hunt stated that the group continues to perform well in a resilient Irish economy against a backdrop of macroeconomic and geopolitical uncertainty [2].

AIB's performance reflects broader market conditions, including the impact of lower interest rates and increased loan loss charges. The bank's ability to navigate these challenges and maintain its dividend payout underscores its operational resilience and strategic adaptability [2].

Investors should consider AIB's dividend sustainability, capital allocation priorities, and balance sheet strength when interpreting these results. The company's ability to exceed expectations despite a profit decline suggests underlying strength, but investors should remain vigilant and consult AIB's complete interim report for further insights [2].

References:
[1] https://www.irishtimes.com/business/2025/08/01/aib-first-half-net-profit-falls-16-amid-lower-interest-rates/
[2] https://www.bloomberg.com/news/articles/2025-07-31/vale-delivers-solid-quarter-despite-lower-prices-weaker-sales