AIB said it expects 'low single digit' growth in underlying earnings for 2003 in a trading statement issued today at lunch time.
Describing the past year as a 'tranistional' year for the bank, it said it had made 'good progress' in its core franchises and is predicting deposit growths in the region of eight to nine per cent for the year.
However, the statement said, in line with previous guidance, adjusted earnings per share for the Group would be impacted in 2003 by the Irish Government levy, restructuring/early retirement charges and the recently announced disposal of the Govett business.
This result will include a negative impact from the translation of non euro denominated earnings.
Overall, it said, it expected to achieve strong constant currency profit growth in the Irish, Great Britain & Northern Ireland and Capital Markets divisions, althouh it warned that its profitability in Poland would be significantly below 2002,
Additionally, it said that its overall loan book is on target to increase by well over 20 per cent this year, compared with projected market growth of about 16 per cent with both mortgage and non-mortgage lending buoyant
Home mortgage balances are also expected to grow by over 30 per cent in 2003 with growth being achieved without relaxing lending policy and practices.
Non-mortgage lending balances are expected to increase by over 20 per cent which includes particularly strong demand from our business banking customers.
In the US, its regional banking is meeting all expectations in the months since the merger of M&T and Allfirst was completed earlier this year, the statement said, and the integration of M&T and Allfirst is on target to deliver the expected benefits.
"We believe that we are at or close to the bottom of the interest rate cycle in our operating economies," it concludes.
"Product margins, with the exception of our Polish deposits previously commented on, are holding up well.
"The principal causes of attrition are business mix, lower rates on the reinvestment of maturing investment funds and the balance sheet funding effect of assets growing faster than liabilities."
Group results for the year ended 31st December 2003 will be announced on 24th February 2004.