Allied Irish Banks (AIBG.L) 2010年年度報告「LSE」.pdf

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1、Annual Financial Report 2010Allied Irish Banks,p.l.c./Annual Financial Report 2010PageBusiness reviewExecutive Chairmans statement4Corporate Social Responsibility8Financial review12Risk management73Governance&oversightThe Board&Group Executive Committee119Report of the Directors122Corporate Governan

2、ce statement125Supervision&Regulation138Financial statementsAccounting policies146Consolidated income statement172Consolidated statement of comprehensive income173Statements of financial position174Consolidated statements of cash flows176Statements of changes in equity178Notes to the accounts182Stat

3、ement of Directors responsibilitiesin relation to the Accounts354Independent auditors report355General informationAdditional information357Glossary379Principal addresses383Index385Contents1Forward-looking informationThis document contains certain forward-looking statements within the meaning of Sect

4、ion 27A of theUS Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934,with respect tothe financial condition,results of operations and business of the Group and certain of the plans and objectives of the Group.In particular,among other statements in this Annual Report,wit

5、h regard to management objectives,trends in results of operations,margins,risk management,competition and theimpact of changes in International Financial Reporting Standards are forward-looking in nature.These forward-looking statements can be identified by the fact that they do not relate only to h

6、istorical or current facts.Forward-looking statements sometimes use words such as aim,anticipate,target,expect,estimate,intend,plan,goal,believe,may,could,will,seek,continue,should,assume,or otherwords of similar meaning.Examples of forward-looking statements include among others,statementsregarding

7、 the Groups future financial position,income growth,loan losses,business strategy,projectedcosts,capital ratios,estimates of capital expenditures,and plans and objectives for future operations.Because such statements are inherently subject to risks and uncertainties,actual results may differ materia

8、lly from those expressed or implied by such forward-looking information.By their nature,forward-looking statements involve risk and uncertainty because they relate to events and depend oncircumstances that will occur in the future.There are a number of factors that could cause actual resultsand deve

9、lopments to differ materially from those expressed or implied by these forward-lookingstatements.These are set out in Risk factors on pages 74-78.These factors include,but are not limitedto the effects of the challenging economic environment,both domestically and internationally,constraintson liquid

10、ity and the challenging liquidity environment for the Group created by market reaction to factorsaffecting Ireland and the Irish economy,the impact of further downgrades to the Irish sovereign ratings andother country ratings,or the Groups credit ratings,the uncertainty of further extensions of the

11、ELGScheme,systemic risks in the markets the Group operates in,the ability to access capital to meet targetedand minimum capital requirements for the Group,customer and counterparty credit quality,the effects ofAIBs participation in the Credit Institutions(Financial Support)Scheme,the National Pensio

12、ns ReserveFund Commission investments,the National Asset Management Agency programme and the ELG Scheme,conditions that may be imposed by the European Commission following consideration of the Groupsrestructuring plan,market risk,including non-trading interest rates,operational and reputational risk

13、s,theeffects of continued volatility in credit markets,the effects of changes in valuation of credit market exposures,changes in valuation of issued notes,changes in fiscal or other policies adopted by various governments and regulatory authorities,the effects of changes in taxation or accounting st

14、andards andpractices,acquisitions and disposals,the risks relating to the Groups deferred tax assets,future exchangeand interest rates and the success of the Group in managing these events.Any forward-looking statementsmade by or on behalf of the Group speak only as of the date they are made.AIB cau

15、tions that the foregoing list of important factors is not exhaustive.Investors and others should carefully consider theforegoing factors and other uncertainties and events when making an investment decision based on any forward-looking statement.In light of these risks,uncertainties and assumptions,

16、the forward-looking eventsdiscussed in this Annual Financial Report may not occur.The Group does not undertake to release publiclyany revision to these forward-looking statements to reflect events,circumstances or unanticipated eventsoccurring after the date hereof.220102009 m mResultsTotal operatin

17、g income(3,357)4,106Operating loss(12,124)(2,683)Loss before taxation from continuing operations(12,071)(2,662)Profit/(loss)after taxation from discontinued operations199(45)Loss attributable to owners of the parent(10,232)(2,413)Per 0.32 ordinary/CNV shareLoss basic from continuing operations(571.1

18、c)(203.5c)Loss diluted from continuing operations(571.1c)(203.5c)Earnings/(loss)basic from discontinued operations7.1c(11.7c)Earnings/(loss)-diluted from discontinued operations7.1c(11.7c)Dividend-Dividend payout-Net assets(0.04)7.81Performance measuresReturn on average total assets(6.21%)(1.29%)Ret

19、urn on average ordinary shareholders equity(222.5%)(24.8%)Statement of financial positionTotal assets145,222174,314Ordinary/CNV shareholders equity(80)6,970Shareholders equity3,65910,709Loans and receivables to customers86,350103,341Customer accounts52,38983,953Capital ratiosCore tier 1 capital4.0%7

20、.9%Tier 1 capital4.3%7.2%Total capital9.2%(1)10.2%(1)At 31 December 2010,the Group,on a consolidated and individual basis,benefited from derogations from certain regulatory capital requirementsgranted on a temporary basis by the Central Bank of Ireland.The requirement for derogations arose as a resu

21、lt of loan impairment provisions at 31 December 2010.These derogations remained in place until the completion of the liability management exercise on 24 January 2011.Financial highlights32010 was an extremely difficult 12 months for AIB and the whole of the Irish banking industry.It was a year that

22、culminated in theannouncement that the Irish Government was to take a majority stake in AIB.This report covers our performance in 2010 and outlines what we and the Government are doing to build a stronger and morestable organisation one that we believe will over time return to profitability,justifyi

23、ng and rewarding the tangible support thetaxpayers of Ireland have given us.I know that our shareholders have been deeply angered and upset by the financial losses they have suffered and the traumaticeffect of this decline on themselves and their families.Over the past three years we estimate that t

24、hose losses amounted to more than 18 billion for private investors.I,along with my AIB Board colleagues,deeply regret this situation.I know there is little I can saythat will alleviate the impact of these events.The road to recovery may well be a long one but we are determined to return the bankto s

25、tability and profitability as quickly as possible.I acknowledge and reiterate our gratitude for the support of taxpayers.None of us at AIB underestimate its importance and all ofus are very aware of the responsibility it places on us.AIBs long term future as a viable bank has been validated by the c

26、ommitment of state authorities to our future as one of twoIrish pillar banks,as recently announced by the Minister for Finance,Michael Noonan.This support is being given because it isaccepted AIB is of systemic importance to the domestic economy and that Irelands future economic success requires a p

27、roperly functioning banking system.We look forward to combining with the Educational Building Society(“EBS”)to fulfil our role as one ofthe pillar banks which will support this countrys economic recovery.We are learning the lessons of the past and promise to show more empathy and be more in touch wi

28、th our customers,staff andthe general public in the future.In the year ending this January,we approved more than 40,000 credit applications from small and medium-sized enterprises to avalue of 2.8 billion,part of an overall commitment to lend 6 billion over two years.We have held 116 customer inform

29、ation seminars for SMEs across the country in the past few months,attended by more than6,000 business people.These events will continue this year.We have also set up specialist units aimed at serving the needs of companies in key emerging sectors as part of our promise towork more closely with Enter

30、prise Ireland.In addition,we are improving our credit structures,framework and processes and willinvolve 1,500 staff in enhanced credit skills training programmes.We are also developing other initiatives to meet customer needs and help businesses and home owners under stress.We recognise we have mor

31、e to do to normalise the provision of credit going forward,and we know we must continue to developnew and better ways to support our customers.These ongoing actions demonstrate how AIB wants to be a business that makes a positive contribution to the economy and one which ensures Irish taxpayers see

32、a real return on their enforced investment.Financial performance in 2010The financial performance of AIB in 2010 was extremely poor,though not unexpected given the events of the year and the continuing economic downturn.AIB made a loss after tax of 10.4 billion on continuing operations,including the

33、 losses on thetransfer of assets to NAMA.Bad debts,particularly in our Irish business,were the most significant negative feature of our performance in 2010.AIB did make an operating profit before these bad debt provisions and losses on transfer to NAMA.But our profitability is severely curtailed by

34、what we pay to secure our funding.This funding includes our customer deposits and wholesale market borrowing and is the raw material for our business.The reality is when we lend out that money,the returns we are achieving aresometimes less than what we are paying for the raw material.AIB needs to ac

35、hieve a fair but economic return on its products andservices.CapitalAIBs capital requirements increased significantly in 2010 and 2011.A series of stress tests were carried out on AIB in 2010 and againthis year.It is important to note that it is the opinion of the regulatory authorities that Irish b

36、anks,such as AIB,need to be capitalisedwell in excess of minimum internationally agreed regulatory levels to protect against any future shocks to the financial system and torestore confidence in Irish banks.The original capital target of 7.4 billion,or 8%core tier 1 capital,set in March 2010 after t

37、he European Commission stress testhas been superseded by the new regulatory requirement for Irish banks to have core tier 1 capital ratio levels of at least 10.5%in aExecutive Chairmans statement45base case scenario and 6%in a stress scenario.The recent Prudential Capital Assessment Review(“PCAR”)sh

38、ows that,following aseries of actions already taken,AIB requires total additional capital of 13.3 billion.The State has confirmed its commitment to ensure AIB is recapitalised to the mandated extent.This level of recapitalisation wouldhave seen AIB with a very strong pro-forma core tier one ratio of

39、 22%at the end of 2010.The PCAR,along with the Prudential Liquidity Assessment Review(“PLAR”),were the most onerous stress tests ever conductedon Irish banks and included highly adverse scenarios and assumptions designed to ensure the sector can withstand the most extrememarket conditions.AIB also r

40、aised 8 billion through its own capital raising programme.This programme incorporated various business disposalsincluding the sale of our Polish interests,the sale of our share in M&T Bank Corporation(“M&T”)in the United States,liabilitymanagement exercises and the recent purchase of deposits from A

41、nglo Irish Bank,which also contributed to capital.The AIB loan book AIBs loan book reduced during 2010 by approximately 34 billion reflecting loan transfers to the National Asset ManagementAgency,low customer demand and deleveraging actions we took in our international businesses.Our total loans at

42、the end of theyear,excluding NAMA,were 94 billion excluding 9 billion of loans from AIBs recently sold Polish interests.The quality of our loan book continues to be a key issue for the AIB Board and its management team.In the three years from2008 to 2010,AIBs loan losses totalled 20 billion.An in de

43、pth review of all our lending processes has been completed and we haveset clear key objectives around our credit culture policies and processes to avoid the mistakes of recent times.In the past,AIB had too high an exposure to the construction and property sector.Loans to that sector have now reduced

44、 to 26 billion(excluding mortgages),out of the total loan book of 94 billion.This 26 billion consists of 7.4 billion in land and development loans with the remaining 18 billion of loans in investment property,more than half of which is outside Ireland.Land and development loans have been the biggest

45、 source of bad debts for AIB.Furthermore,in the recently completed PCAR,the capital requirement for AIB has assumed a 60 per cent.hair cut for all residual land and development loans.AIBs largest loan portfolio is Irish mortgages at 27 billion.This represents almost 29%of our total loans.Mortgage cu

46、stomerarrears have increased during 2010,although the pace of increase slowed in the second half of the year.We believe that arrears willcontinue to increase due to the high levels of unemployment in Ireland.Therefore we have increased our mortgage provision levelsreflecting the additional bad debts

47、 we believe are present in our mortgage portfolios but have not been specifically recognised.We have undertaken a comprehensive review of our loan portfolios in 2010 and set aside provisions of 7.3 billion for our continuing operations-a very high but prudent level that reflects the deteriorating ec

48、onomic environment in the latter part of 2010,particularly in Ireland,and further falls in property values.Impaired loans now have 42%specific provision coverage and an additional 2.1 billion has been set aside for losses which wethink are likely to emerge in our loan book.In addition,the capital we

49、 are required to hold by our regulator includes further material buffers for future losses.The scale of these figures is daunting but we are determined to draw a line under the past and moveAIB forward.Bad debts for all banks are closely related to the economic conditions prevailing within their mar

50、kets.Therefore while future baddebt charges are subject to that important factor,we will be unstinting in endeavouring to ensure that AIBs policies,procedures and practices control the risks we take and that we seek to manage them to the highest international standard.Funding and liquidity AIB,in co

51、mmon with other banks,continues to face funding and liquidity issues.Funding conditions in the first part of 2010 werereasonable.But as the year progressed subsequent negative international sentiment about the Irish economy and the banking sectormeant AIBs access to wholesale funding markets was muc

52、h reduced.There were also deposit outflows,most notably from our overseas institutional and corporate customers.This combinationincreased our reliance on funding from monetary authorities and also increased our loan to deposit ratio to 165%at the year end.On 24 February this year more than 120,000 A

53、nglo Irish Bank customer deposits totalling 8.6 billion transferred to AIB.Thismove also saw NAMA bonds transfer to AIB along with the ownership of Anglos operation in the Isle of Man.These transfers are improving our liquidity and are reducing our loan to deposit ratio as we work towards the target

54、 ratio definedby the Central Bank of Ireland of 122.5%by the end of 2013.This is welcome news but much more needs to be done to improve the funding of our business.Market access for the Irish state andthe banks is an essential precondition for a return to normality.Board changes The AIB Board saw co

55、nsiderable change in 2010.Dr Michael Somers was appointed a Non-Executive Director in January.Non-Executive Directors Sean ODriscoll and Jennifer Winter resigned in April with Kieran Crowley and Bob Wilmers leaving inOctober.Executive Chairman Dan OConnor left the board in October and Group Managing

56、 Director Colm Doherty left in November.Iwant to record my thanks to them for their service to AIB.In October,I was appointed as interim Executive Chairman and Jim OHara and Catherine Woods joined the AIB Board asNon-Executive Directors.New management team It is a priority of the AIB Board to ensure

57、 people with both the right mix of skills and of internal and external experience managethe organisation in the future.Our search for a new Chief Executive Officer has started and the AIB Board is working hard to ensurewe attract the right person to this crucial role.We have also carried out a compr

58、ehensive evaluation process to select a new top management team.The members of that teamwho have been selected from within AIB are currently going through the necessary approval processes and we are now actively seeking candidates externally for the remaining roles.Names will be announced as appoint

59、ments are made.Corporate Governance and RiskAIB made progress last year in the way it handles its corporate governance and risk.I want to acknowledge the work Colm Dohertyand Dan OConnor instigated in these areas.We must continue to build strong centralised governance which includes robust control s

60、tandards and functions.The necessity tomove away from fragmented divisional control to a centralised approach is underpinned by findings in reports commissioned fromexternal parties including Promontory,Mazars and Deloitte.AIB has initiated a major risk and governance transformation programme as par

61、t of the wider review of the organisation.Theprogramme is designed to ensure our risk and control frameworks are fit for purpose and are fully compliant with new and additionalregulatory requirements.These frameworks must be resilient and responsive to potential economic and financial shocks and oth

62、er risksthat might emerge in the future.Rebuilding AIB the strategyWhen I took up the role of Executive Chairman,I made a commitment to undertake a review which would develop a new strategyfor AIB.Throughout this review process it has been clear that the challenges we face are enormous but,neverthel

63、ess,surmountable.Toovercome these challenges will require radical change of a magnitude never before undertaken in AIB.This will happen across theorganisation and this will involve difficult decisions and strong actions in relation to our structure,size and focus.We will establish a new core bank wi

64、th a restructured balance sheet achieved through the separation and progressive disposal andwinding down of non-core assets.The present divisional structures will be dismantled and replaced by business units focused on ourcustomers needs.Credit,risk,control and support functions will be significantl

65、y restructured and consolidated.The core business will concentrate on the Irish market including Northern Ireland.It will focus on the personal,small business,commercial and corporate sectors and also include a selective overseas presence,supporting expatriate Irish business as well as cross-border

66、trade and investment flows.Non-core will comprise assets that no longer fit with our new strategic direction and some businesses or portfolios which represent excessive risk or offer a poor return profile.These businesses will be wound down and reduced in size over time.Hasty disposals or fire sales

67、 of assets will be avoided.To ensure AIB is best placed to serve our business and personal customers,our product ranges will be simplified and re-positionedto give value at an acceptable return.We will invest in new technologies to increase our speed,reach and efficiency.All of this will be achieved

68、 without losing sight ofthe key objective of supporting our customers through this challenging period and helping to revitalise the national economy.AIB will become a smaller organisation with a fresh leadership team,a restructured balance sheet,a redefined customer strategyand a new operating model

69、.6This new AIB will form a strong foundation from which a profitable business can be rebuilt.This business will be well positioned togain a significant share of the stronger national banking market which,we believe,will emerge in time.The combination with EBSwill further strengthen this proposition.

70、PeopleThe transformation to a more focused,more cost effective organisation will inevitably entail job losses.AIB is negotiating with stateauthorities to progress a programme of job cuts this year and into 2012.In the meantime,there is much work to be done to address both AIBs problem loans and issu

71、es with our legacy processing andoperating systems.This is a priority for 2011.AIB will need also to attract and retain individuals with the specific skills needed for the future.Our competitive edge in this areamust not be blunted.There is no reason that,in time,AIB cannot become,once again,a prefe

72、rred employer with staff proud to workfor the organisation.Economic outlookThe speed at which AIB recovers and returns to profit is heavily influenced by Irelands economic prospects,which remain challenging.Throughout 2010 and into this year,demand for new loans from small firms and personal custome

73、rs has been subdued.Thistogether with a weak capital and funding position has reduced the ability of AIB to lend to these sectors.We are also seeing existingcustomers paying down existing debts rather than increase borrowing.However AIB accepts it needs to do more to resume normallending.Latest offi

74、cial figures show that the economy contracted again last year.Real GDP declined by 1%in 2010 but there are hopefulsigns that a positive rate of growth will be achieved in 2011.Our exports are performing very strongly,increasing by almost 10%in real terms last year.Inward foreign direct investment is

75、 alsovery buoyant and global growth prospects remain favourable.These are good omens for the future as exports now form a very largepart of the economy.However,on the domestic side of the economy,demand continues to fall and may not stabilise until 2012 or later.The latest unemployment statistics we

76、re disappointing.Employment continues to fall(down almost 3.5%in the last quarter of 2010 in annualterms)and the unemployment rate is now well over 14%.Job losses,higher inflation and tighter budgetary measures will depress consumer spending in 2011.Investment spending will also fall again this year

77、.On a more positive note,the rate of decline in domestic demand is slowing and consumers are becoming slightly more optimistic.The underlying budget deficit has also been stabilised.A resolution of the Irish banking crisis should also have a more profound positive influence on domestic and internati

78、onal confidence in Irelands ability to recover from the deep economic and financial crisis of the past three years.The futureIn 2010,we have endured the heavy consequences of our problems.I want to thank customers for the tremendous support we havereceived from so many of them.With the completion of

79、 our plan,the support of taxpayers,customers and shareholders,AIB has taken the first steps on the road torecovery to a future as a standalone,independent bank.The energy,resilience and dedication shown by AIB staff in the last few months has been deeply impressive to me.I want to takethis opportuni

80、ty to pay tribute to the way they have faced the challenges of recent times with great patience,commitment and capacity for hard work.Ireland needs healthy and vibrant financial services able to support economic recovery and growth.The Government proposalsannounced on 31 March 2011 give us a firm fo

81、undation to rebuild our business and return it to profitability.I believe this bank will remain at the heart of the Irish financial sector.My colleagues and I are wholly committed to ensure thisis the case.AIB continues to face serious challenges and problems.The hard days are not over yet but I pro

82、mise to do everything in mypower to make sure that next year we have a more positive story to tell.David HodgkinsonExecutive Chairman 11 April 20117AIB has worked with all stakeholders to provide Corporate Social Responsibility(“CSR”)support and the focus hasbeen to adjust to the rapidly changing ma

83、rket environment.AIB is committed to further embedding CSR policies andpractices across the Group in order to restore its credibility and reputation.MarketplaceAIB recognises its role in supporting its customers and in contributing to the general economic recovery.To support thisobjective,a number o

84、f initiatives were introduced.Small and Medium Enterprises(“SMEs”)A new AIB Small Business Recovery Scheme was launched in 2010 specifically targeted at small business customers inIreland.The aim of the scheme,is to support viable small businesses through the current economic conditions.Thescheme,wi

85、th a fund of 500 million,will achieve this by restructuring existing borrowings and providing additionalworking capital to meet businesses needs.Seminars were held throughout Ireland,entitled AIB Open for Business.These were attended by SME owners andprofessional and business support groups.In addit

86、ion,a key business influencers communication programme for professional advisers to SMEs was launched,together with sponsorship and awards schemes to support and promotebusiness confidence.In 2010,at the request of the Irish Government,a Credit Review Office was established to provide a process tore

87、view decisions made by the bank to refuse,reduce or withdraw credit facilities to SMEs,sole traders or farm enterprises.The third quarterly report from the Credit Review Office,issued in February 2011,acknowledged theprogress that AIB has made on its commitments to support these customers both in te

88、rms of meeting the 6 billionlending target set by the Government by the end of March 2012 and the range of initiatives AIB has undertaken to promote demand for credit.Personal CustomersDuring 2010,an online campaign Reviewing your Finances was launched which helps personal customers review thecurren

89、t shape of their finances and provides them with suggestions as to what should be considered.A brochure entitled Managing your personal borrowings was also launched,which focuses on customers in difficultyand in need of debt consolidation.This document encourages customers to contact AIB as soon as

90、possible to reviewtheir current situation and requires them to provide background information before meeting on a one-to-one basis witha staff member to find a viable solution.To support these initiatives,a specific debt management staff engagementtraining programme has been implemented.MortgagesAIB

91、 supported mortgage customers by putting in place a range of measures including interest only or deferred repayments.Under the Central Bank of Irelands Code of Conduct on Mortgage Arrears,AIB introduced the five stepMortgage Arrears Resolution Process to help mortgage customers in arrears,or at risk

92、 of going into arrears.This alsoapplies to customers where an alternative repayment arrangement already in place breaks down or expires.GeneralSince 2006,AIB has been contributing to the Social Finance Foundation,an organisation which makes loan financeavailable at affordable interest rates to commu

93、nity based projects and micro enterprises,which yield a social and financialreturn.At the end of 2010,15 million of these approved loans have been drawn down.AIB initially provided 6.27 million to the Foundation and since 2009 has also provided an annual payment of 1.5 million,which will continue to

94、 2021.In addition,AIB continued to report quarterly to the Department of Finance and the Central Bank of Ireland on itscustomer support obligations under the terms of the Government recapitalisation package.Corporate Social Responsibility8People2010 was another year of significant change for the sta

95、ff in AIB.Various assets and businesses were put up for sale andthere were a number of changes in top management and at Board level.Following the appointment of the ExecutiveChairman in October 2010 a review of the organisation commenced with a view to defining the future shape of AIB interms of its

96、 business focus,its strategy,its structure and its staff.The Chairman has communicated regularly to staff on theprogress of the review.The bank continued to engage with the Irish Bank OfficialsAssociation,the recognised trade union for bank officials in the Republic of Ireland,Northern Ireland and G

97、reat Britain,on a range of issues including job security during 2010 under the partnership arrangement.Training and development continued during 2010 in a number of areas.An enhanced Credit Professionalism programme was introduced which builds on existing skills and introduces a focus on financial l

98、iteracy and the professional requirements of AIB and the financial services industry.Capital Markets ran tailored leadership and development and customer relationship programmes.Mandatory health and safety training was rolled out through ane-learning based course outlining responsibilities under the

99、 AIB Group Safety Statement.Other mandatory courses,under AIBs Group Compliance and Ethics training programme,covered topics on anti-money laundering,data protection,ethics,treating customers fairly,fraud prevention and policies.In Ireland,4,584 staff achieved the Minimum Competency Requirements acc

100、reditation required for their roles,sincethe introduction in 2006 of the Central Bank of Irelands Minimum Competency Requirements.Ongoing continuingprofessional development is required by these staff to maintain this accreditation.AIBs head office at Bankcentre was recognised for its accessibility d

101、uring 2010 and was awarded an Able BusinessExcellence Award,granted by leading disability charity Rehab and the quality experts Excellence Ireland QualityAssociation.In addition,AIB Group was recognised at the 02 Ability 2010 Awards achieving ability company status inthe retention and wellbeing cate

102、gory.Both of these awards are welcome reflections of AIBs commitment to AIB staffand customers who have disabilities.Employee information AIB Group*Total staff*23,208Average age of employees(years)40Voluntary attrition4.2%Average length of service(years)14Permanent/temporary staff93%(P)Male/Female s

103、taff35%(M)7%(T)65%(F)Part-time/Full time staff6%(PT)94%(FT)*Information as at December 2010,including BZWBK,excludes Polish subsidiaries.*Reflects the Full Time Equivalent(“FTE”)of staff in payment,includes staff on paid leave arrangements 9CommunityCharitable groups and programmes are seeking suppo

104、rt now more than ever.In 2010,AIB continued to support community projects through the Better Ireland programme.1.82 million was donated to 546 childrens projectsthroughout the country making a total of 17.85 million donated to deserving projects in Ireland since 2001.Staff across AIB Group donated m

105、ore than 182,000 to charities during 2010.These funds are just part of theeffort across the network which saw AIB staff donating both money and time to Irish and international charities.AIB is in its third decade of sponsorship with the Gaelic Athletic Association(“GAA”)and in particular,the AIB All

106、Ireland Club Championships which focus on club and games development.AIB also sponsored the AIB Ladies IrishOpen which attracted the strongest field of women professional golfers in its history,profiling Ireland and generatinglocal economic benefit.In Ireland,AIB has given the use of its corporate h

107、ospitality boxes in Croke Park and the AvivaStadium to registered charities in the Republic of Ireland,to entertain their donors and patrons for the 2010/2011 GAAand rugby seasons.Allied Irish Bank(GB)as part of its five year Founding Partnership sponsorship with Ascot Racecourse hosted acharity day

108、 with 240 guests attending.The organisations involved included Christian Vision,The Eden Project,and TheNational Association for the Care and Resettlement of Offenders,Muscular Dystrophy Campaign,Nordoff RobbinsMusic Therapy,Rainbow Family Trust and St Giles Hospice,all of whom hosted a table of gue

109、sts and supporters at theevent.A number of financial education programmes continued during the year.AIB had the highest number of corporatevolunteers deliver Junior Achievements curriculum in schools in Ireland,preparing young people for the world of workand teaching financial literacy;AIB Kids webs

110、ite www.aib.ie/kids,which teaches children about finances in an easy,informative and fun way;and AIB Build a Bank Challenge,a programme aimed at senior students introducing theconcept of banking and finance in an interactive manner.In addition,AIB is a lead member of the Business in theCommunity net

111、work and supports the BITC Schools Business Partnership,a programme which aims to addresseducational disadvantage in Ireland.AIB worked with the National Consumer Agency(“NCA”)in the development of a pilot programme calledMoney skills for life.This programme involves a one-hour presentation to emplo

112、yees in their workplace coveringtopics including managing your money,saving and investing,planning for retirement and dealing with debt,among others.The programme is available to all workplaces in Ireland,run by the NCA with presenters from the financial services industry,including volunteers from A

113、IB.AIB continued to support the arts and sponsored the Irish Photojournalism Awards for the eighth year.These annualawards,which are run in conjunction with the Press Photographers Association of Ireland recognise,reward and showcase excellence in press photography.The AIB Photojournalism exhibition

114、 travelled to AIB branches around thecountry in order to give access to the exhibition to as wide an audience as possible.Loans of key artworks from the AIB Art Collection to municipal,regional and national galleries continued during2010.For example,one exhibition at Draocht in Blanchardstown,Co Dub

115、lin in partnership with Fingal CountyCouncils Arts Office entitled,“In Colour”,contained a selection of 20th century works by Irish artists which were onloan from both AIB Group and other collections.This exhibition was accompanied by an extensive educationprogramme including mediated tours,resource

116、 packs and talks by featured artists.EnvironmentAIB is fully committed to sustainability with a commitment to live up to its responsibilities and continuously seek toimprove efforts in this area.In 2010,the results of the measurement of AIBs carbon footprint calculation in the Republic of Ireland we

117、reassessed using data collected in late 2009.The calculation shows that AIBs total carbon footprint has reduced by 16%since the 2006 assessment period.For the same period,the reported carbon footprint for energy has reduced by 9%.Although this falls short of AIBs stated target of 10%,it is attributa

118、ble to a more thorough methodology for acquiringthe 2009 data,thus accounting for greater emissions.Corporate Social Responsibility10Energy is a key area where AIB has concentrated efforts resulting in our levels of electrical energy consumption in 2010remaining approximately 15%below corresponding

119、periods in 2009.These results were achieved through a Bankcentre,Dublin energy reduction project which is ongoing.A bin-less office initiative was introduced in AIBs head office at Bankcentre.This has produced very positive resultswith the volume of general waste reducing by 11.78 tons per month,fro

120、m 29.4 tons in January 2010,to 17.62 tons inJune 2010.The effect of this is a significant reduction in waste being diverted from landfill to be recycled and also areduction in costs.In Northern Ireland,the 12th Business in the Community Environmental benchmarking ARENA Survey reportedFirst Trust Ban

121、k(“FTB”)achieving a top 20%position for the second year in a row,in what is widely recognised as theprincipal measure of environmental engagement in Northern Ireland.FTB achieved an overall score of 89%whichcompared very favourably with the average score of 72%and the financial sector average of 69%

122、.FTB also launched aunique community shredding event.Shred-It Ireland located one of its mobile shredding units at an FTB branch forthe day and provided a document destruction service to the general public.This initiative helped to prevent fraudthrough identity theft and also supported the environme

123、nt by diverting documents away from landfill and into recycled household paper products.AIB in the Republic of Ireland launched the Cycle to Work scheme a Government introduced tax advantagedinitiative which supports a greener environment.Take-up represented 7.5%of all AIB staff in the Republic of I

124、relandarea,almost double the national average take-up of 4%.The AIB Add more green e-statement initiative continued to be popular with over 268,000 customers opting foronline rather than paper statements.AIB donates 2 for every customer who takes this option and this has generatedover 1,000,000 for

125、the Add more green fund.This fund is used to support environmental projects both in Ireland andinternationally.One such project,launched this year in conjunction with Coillte,was the development of a native woodland area with both recreational and educational facilities at Carrigeenroe,Co Roscommon.

126、As well as supportingbiodiversity objectives,the addition of an amenity trail for visitors brings the site to life as a living educational resourcefor the community.BenchmarkingAIB participated in the development of ISO 26000:Guidance for social responsibility(a new ISO guidance standard),through th

127、e National Standards Authority of Ireland.AIB will continue to review its CSR practices using this guidance.During 2010,AIB also contributed to the Ethical Investment Research Services annual survey,the results of whichqualified AIB for inclusion in the FTSE4Good Index,the leading global responsible

128、 investment index.In addition,AIBalso participated in the Carbon Disclosure Project Ireland report and the Dow Jones Sustainability Index.All of theseallow AIB benchmark corporate responsibility policies and practices in a number of areas including labour standards,environmental sustainability and s

129、upply chain management among others and identify gaps where action can be taken.AIB participated in the pilot programme supporting the development of Business in the Community IrelandsBusiness Working Responsibly mark during the year.This again provided key feedback in terms of AIBs current policies

130、and practices and is an excellent tool to use to improve in the area of CSR.More information description1.1 History131.2 Relationship with the Irish Government131.3 The businesses of AIB Group151.4 Organisational structure171.5 Competition 181.6 Economic conditions affecting the Group 192.Financial

131、data213.Management report 244.Capital management585.Critical accounting policies&estimates 616.Deposits and short term borrowings 657.Financial investments available for sale 688.Financial investments held to maturity719.Contractual obligations 72Financial review131.1 History AIB Group,originally na

132、med Allied Irish Banks Limited,was incorporated in Ireland in September 1966 as a result of the amalgamation of three long established banks:the Munster and Leinster Bank Limited(established 1885),the Provincial Bank ofIreland Limited(established 1825)and the Royal Bank of Ireland Limited(establishe

133、d 1836).AIB Group conducts retail and commercial banking business in Ireland.It has an extensive branch network across the country,ahead office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin.AIB also hasretail and corporate businesses in the

134、UK,offices in Europe and a subsidiary company in the Isle of Man and Jersey(Channel Islands).In December 1983,AIB acquired 43 per cent.of the outstanding shares of First Maryland Bankcorp(“FMB”).In 1989,AIB completed the acquisition of 100 per cent.of the outstanding shares of common stock of FMB.Du

135、ring the 1990s,there were a number of bolt-on acquisitions,the most notable being Dauphin Deposit Bank and Trust Company,a Pennsylvania chartered commercial bank which was acquired in 1997.Subsequently,all banking operations were merged into Allfirst Bank.In 2003,Allfirstwas integrated with M&T Bank

136、 Corporation(“M&T”).Under the terms of the agreement AIB received 26.7 million shares in M&T,representing a stake of approximately 22.5 per cent.in the enlarged M&T,together with US$886.1 million cash,of which US$865 million was received by way of a pre-sale dividend from Allfirst Bank.The Group ent

137、ered the Polish market in February 1995,when it acquired a non-controlling interest in Wielkopolski BankKredytowy S.A.(“WBK”).The Group subsequently increased its shareholding in WBK to 60.14 per cent.through a number of additional transactions.In September 1999,AIB completed the acquisition of an 8

138、0 per cent.shareholding in Bank Zachodni S.A.(Bank Zachodni)from the State Treasury,and through a number of subsequent transactions increased its shareholding in BankZachodni to 83 per cent.In June 2001,WBK merged with Bank Zachodni to form BZWBK,following which the Group held a70.5 per cent.interes

139、t in the newly-merged entity.The Groups interest in BZWBK decreased to approximately 70.36 per cent.whenBZWBKs share capital was increased in 2009.In October 1996,AIBs retail operations in the United Kingdom were integrated and the enlarged entity was renamed AIB Group(UK)p.l.c.with two distinct tra

140、ding names,First Trust Bank in Northern Ireland and Allied Irish Bank(GB)in Great Britain.In January 2006,Aviva Life&Pensions Ireland Limited and AIBs life assurance subsidiary,Ark Life were brought together under aholding company Aviva Life Holdings Ireland Limited(“ALH”),formerly Hibernian Life Ho

141、ldings Limited.This resulted in AIB owning an interest of 24.99%in ALH.Following this,AIB entered into an exclusive agreement to distribute the life and pensionsproducts of the venture.Since mid 2008,AIB Group has experienced many significant challenges as a result of issues arising from the financi

142、al crisis.TheGroup had expanded significantly outside Ireland in the past,as outlined above,as well as having smaller operations and interests inother markets.However,resulting from the provision of support to AIB as part of a broader arrangement with the Irish Governmentand the European Commission,

143、the Group agreed in 2010 to replenish capital levels by way of disposals,namely its BZWBK andM&T shareholdings(and selected other businesses).AIB disposed of M&T on 4 November 2010 and agreed the sale of BZWBK on10 September 2010.The sale of BZWBK was completed on 1 April 2011.AIB ceased trading on

144、the main markets of the Irish and London stock exchanges on 25 January 2011.Its ordinary shares are nowlisted on the Enterprise Securities Market of the Irish Stock Exchange and its ADRs continue to be listed on the New York StockExchange.1.2 Relationship with the Irish Government Since the onset of

145、 the global and Irish financial crisis,AIBs relationship with the Irish Government has changed significantly.As at 31 December 2010,the Government,through the National Pension Reserve Fund Commission(“NPRFC”),held49.9 per cent.of the ordinary shares of the company(the share of the voting rights at s

146、hareholders general meetings),10,489,899,564convertible non-voting(“CNV”)shares and 3.5 billion 2009 Preference Shares.On 8 April 2011,the NPRFC converted the totaloutstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB,thereby increasing its holding to 92.8%of theordinary share

147、capital.In addition to its shareholders interests,the Governments relationship with AIB is reflected through formal and informaloversight by the Minister and the Department of Finance and the Central Bank of Ireland,representation on the Board of Directors(three non-executive directors are Governmen

148、t nominees),participation in NAMA(defined below),and otherwise.Financial review-1.Business description 14Participation in the National Asset Management Agency(“NAMA”)has had a particularly significant impact on the size,quality,sectoral and geographical spread of AIBs loan portfolio.Between early Ap

149、ril 2010 and 31 December 2010,AIB transferred to NAMA,financial assets with a gross carrying value of 18.6 billion in exchange for NAMA senior and subordinated bonds of 8.5 billionof nominal value.Furthermore,financial assets with a gross carrying value of 2.3 billion were,at 31 December,due to tran

150、sfer inearly 2011.In March 2011,1.1 billion of this remaining amount transferred.An element of the joint EU/IMF programme,outlined below,requires that the NAMA scheme be extended and in this regard,abill was introduced in the Dail(lower house of the Irish parliament)in early 2011,however,no legislat

151、ion has been enacted to date.In addition to its ownership interest in AIB,the Governments relationship with AIB has included the guarantee of a wide rangeof AIBs obligations,including deposits and specified senior debt obligations,as set forth in AIBs consolidated financial statements,thenotes there

152、to and the ELG and other schemes described therein.The provision of this support helped to allay the concerns ofdepositors and other creditors in 2009 and 2010.However,the worsening financial condition of the Irish sovereign in late 2010 had acorresponding adverse impact on customer deposit levels i

153、n AIB and other Irish banks with the result that the need for furtherGovernment and international support became evident.On 28 November 2010,the Irish Government agreed in principle to the provision of 85 billion of financial support throughthe European Union(“EU”)and International Monetary Fund(“IM

154、F”)Joint Programme for Ireland.The Irish Governments contribution to the 85 billion facility will be 17.5 billion.One part of this programme deals with the restructuring and reorganisation of the Irish banks for which 35 billion of the financial support is earmarked.It is too early to predict what f

155、inal benefits AIB will ultimately derive from this Joint Programme.On 31 March 2011,following PCAR and PLAR assessments which took place in February/March 2011,the Central Bankannounced the following:-a minimum capital target for AIB of 10.5%core tier 1 in a base scenario and 6%core tier 1 in a stre

156、ssed scenario;-a target loan to deposit ratio of 122.5%by 2013,through a combination of run-off and deleveraging;and-a requirement to raise 13.3 billion(10.5 billion plus a 2.8 billion capital buffer).Following on the results of these assessments,the Minister for Finance announced on 31 March 2011 a

157、 restructuring of the Irishbanking system.This restructuring revolves around two pillar banks,with AIB and EBS,a mutual society,merging in the comingmonths(subject to State aid and regulatory approvals)to form one of these pillar banks.The non-core division of the combined entitywill be required to

158、deleverage assets to achieve the target loan to deposit ratio.The Government signalled its support for therecapitalisation of the Irish banks,which amounts to 24 billion,to ensure that the Irish banking system is returned to health.It hasalso signalled that it will seek direct contributions to solvi

159、ng the capital issues of the banking system by requiring further significantcontributions from other sources,including from subordinated debt holders,by the sale of assets to generate capital and wherepossible,by seeking private sector investors.The Irish Governments support of AIB reflects the impo

160、rtant role it plays in the Irish economy.However,it has required AIB toseek Irish Government and European Commission approval of comprehensive restructuring plans in accordance with EU state aidand other requirements and to otherwise undertake business and other initiatives that support Governmental

161、 priorities.In addition toparticipation in NAMA,AIB restructuring approvals have so far been conditioned on capital raising initiatives such as the M&T andBZWBK disposals referred to above,lending initiatives to support SMEs,first time buyers of residential premises in Ireland and othercustomers,an

162、agreement to purchase certain deposits from Anglo Irish Bank in early 2011,and other initiatives.Irish Government,EU and related initiatives will have a material impact on the future financial condition and prospects of AIB.Financial review-1.Business description 151.3 The businesses of AIB Group Th

163、e business of AIB Group is now conducted through three major operating divisions namely:AIB Bank ROI,Capital Markets andAIB Bank UK.A decision was made in March 2010,to hold certain investments for sale which included principally AIB Group(UK)(which formed AIB Bank UK division);M&T Bank Corporation;

164、and BZWBK and Bulgarian American Credit Bank AD(“BACB”)which were the predominant elements of Central and Eastern Europe division.The sale of M&T Bank Corporation was completed inNovember 2010.A sale was agreed for BZWBK on 10 September 2010 and was completed on 1 April 2011.In relation to AIBGroup(

165、UK),AIB decided to halt the sales process in November 2010 in the light of continuing challenging market conditions in theUnited Kingdom.At 31 December 2010,AIB Group(UK)business is shown as part of continuing operations.The current divisional structure is under review as part of the restructuring p

166、lan for the organisation.The businesses of AIBGroup are described below.AIB Bank Republic of Ireland division AIB Bank Republic of Ireland(“ROI”)Division,with total assets of 57.9 billion at 31 December 2010,covers retail and business banking operations in the Republic of Ireland,Channel Islands and

167、 Isle of Man,in addition to asset finance,wealth management andcredit card services.ROI Division supports both business and personal customers and commands a strong presence in all key sectorsincluding SME,mortgages and personal.It provides customers with choice and convenience through:-A range of d

168、elivery channels consisting of over 182 branches,86 outlets and 14 Business Centres,783 ATMs and AIB Phone andInternet Banking as well as an alliance with An Post which gives our customers banking access at over 1,000 Post Offices nationwide;-A wide range of banking products and services;and-A choic

169、e of payment methods including cheques,debit and credit cards,self service and automated domestic and international payments.AIB is the principal banker to many leading public and private companies and government bodies,and plays an important role inIrelands economic and social development.AIB is a

170、founding member of the Irish Payment Services Organisation(“IPSO”)and is amember of the Irish Clearing Systems for paper,electronic and realtime gross settlement(“RTGS”).The main distribution channelfor the division is an extensive branch network structured around retail banking and business banking

171、.Retail Banking concentrates onthe personal market and smaller businesses.Business Banking,through a network of business centres,focuses on medium to largerSMEs.Complementing the AIB branch network services is our AIB Direct Channels operation(leading Irish on-line banking service),offering self ser

172、vice capability through online,telephone,ATM,self service kiosks and automated payments.AIB Finance&Leasing is the asset financing arm in the Republic of Ireland.Its services include leasing,hire purchase and otherasset backed finance delivered via the branch network,a direct sales force,broker inte

173、rmediaries and also via internet.The Wealth Management unit delivers wealth propositions to AIB customers,tailored to the needs of specific customer segmentsand also encompasses AIBs share of ALH,AIBs venture with Aviva Group Ireland plc.AIB Card Services provides credit and debit card products to t

174、he ROI personal and corporate customer base,supporting their payment and consumer credit requirements.The products are delivered across all channels.AIB has a joint venture with First DataInternational,trading as AIB Merchant Services.This provides access to leading edge technology,enhanced risk man

175、agement,operational capability and best in class functionality for merchants and partners in the merchant acquiring business.Capital Markets division AIB Capital Markets activities,with total assets of 40.1 billion at 31 December 2010,comprises corporate banking,treasury andinvestment banking.These

176、activities are delivered through the following business units:AIB Corporate Banking,Global Treasury andInvestment Banking.AIB Corporate Banking provides a fully integrated,relationship-based banking service to top-tier companies,both domestic andinternational,including financial institutions and Iri

177、sh commercial state companies.AIB Corporate Bankings activities also includeparticipating in,developing and arranging acquisition,project,property and structured finance in Ireland,the UK,North America andContinental Europe.Corporate Bankings not-for-profit activities are provided through Allied Iri

178、sh America(1).Corporate Banking hasalso originated and manages four Collateralised Debt Obligation(“CDO”)funds(2).The assets under management of the CDO fundsat 31 December 2010 were 1.6 billion.Global Treasury,through its treasury operations,manages on a global basis the liquidity and funding requi

179、rements and the interestand exchange rate exposure of the Group.In addition,it undertakes proprietary trading activities,and provides a wide range of treasury and risk management services to corporate,commercial and retail customers of the Group.It also provides import and exportrelated financial se

180、rvices through its international activities.16Investment Banking provides a range of services including corporate finance through AIB Corporate Finance Limited;outsourcedfinancial services through AIB International Financial Services Limited;and asset management through AIB Investment Managers Ltd(“

181、AIBIM”).During 2010,Investment Banking provided corporate finance and stockbroking services through GoodbodyStockbrokers(3).AIBIM manages assets principally for institutional and retail clients in the Republic of Ireland.Investment Banking alsoincludes the management of property fund activities(prin

182、cipally in Polish properties).AIB Capital Markets is headquartered at Dublins International Financial Services Centre and has operations in a number of principal UK,US and Polish cities;and in Frankfurt,Paris,Luxembourg,Budapest,Zurich and Toronto.AIB Bank UK division The AIB Bank UK division,with t

183、otal assets of 20.9 billion at 31 December 2010,operates in two distinct markets,Great Britainand Northern Ireland,with different economies and operating environments.The divisions activities are carried out primarilythrough AIB Group(UK)p.l.c.,a bank registered in the UK and regulated by the Financ

184、ial Services Authority(“FSA”).Great BritainIn this market,the division operates under the trading name Allied Irish Bank(GB)from 31 full service branches and 1 businessdevelopment office.The divisional head office is located in Mayfair,London with a significant back office operation in Uxbridge,West

185、London and a divisional processing centre in Belfast.A full service is offered to business customers,professionals,and high net worthindividuals.Allied Irish Bank(GB)is positioned as a specialist business bank,providing a relationship focused alternative to UK high streetbanks.The bank offers a full

186、 range of banking services,including daily banking,deposits solutions,corporate banking and internationaltrade expertise to SMEs,mid-size corporates and professionals in the UK.Its services to businesses are complimented by its wealthmanagement and personal banking offerings,delivered through the tr

187、aditional branch network and online banking systems.AlliedIrish Bank(GB)s relationship approach has been validated externally on a number of occasions over the past decade by BusinessSuperbrands and Forum of Private Business and the banks commitment to staff development has consistently achieved the

188、 recognition of the Investors in People(“IiP”)standard since 1995.Northern IrelandIn this market,the division operates under the trading name First Trust Bank from 48 branches and outlets throughout NorthernIreland.The First Trust Bank head office is located in Belfast,together with the divisional p

189、rocessing centre.A full service,including internet and telephone banking is offered to business and personal customers across the range of customersegments,including professionals and high net worth individuals,small and medium enterprises,as well as the public and corporatesectors.Specialist servic

190、es,including mortgages,credit cards,invoice discounting and asset finance are based in Belfast and deliveredthroughout the division.First Trust Independent Financial advisers provides sales and advice on regulated products and services,including protection,investment and pension requirements.First T

191、rust Bank is strongly rooted in the communities which it serves and supports a wide range of business,community and charitable initiatives,with strong links to the education sector in Northern Ireland.Discontinued operationsBZWBK was held as a discontinued operation at 31 December 2010,with the sale

192、 completed on 1 April 2011.BACB was held as adiscontinued operation at 31 December 2010.(1)The process of winding down the activities of Allied Irish America began during 2010.(2)On 18 February 2011,AIB Capital Markets plc entered into an agreement to sell their collateral management business with t

193、he intention of being replaced as investment manager to the CDO funds.(3)The sale of Goodbody Holdings Limited and associated companies was completed subsequent to Central Bank approval received on 24 December 2010.Financial review-1.Business description 17AIB BANK ROI DIVISIONAllied Irish Banks,p.l

194、.c.General retail and business banking throughsome 268 branches and outlets and 14 business centres in the Republic of Ireland.AIB Mortgage BankThe Companys principal activity is the issueof Mortgage Covered Securities for the purpose of financing loans secured on residential property or commercial

195、property,in accordance with the Asset CoveredSecurities Act,2001.AIB Leasing LimitedAsset financing company providing leasingproducts.AIB Insurance Services LimitedProvision of general insurance services.Actsas an insurance intermediary.AIB Bank(CI)LimitedJersey(Channel Islands)based company providi

196、ng a full range of offshore bankingservices including lending and internetbanking facilities and also offering offshoretrust and corporate services through a subsidiary company.It also maintains abranch in the Isle of Man.CAPITAL MARKETS DIVISIONAllied Irish Banks,p.l.c.Management of liquidity and f

197、undingneeds;interest and exchange rateexposures;financial market tradingactivities;provision of lending;tradefinance and commercial treasury services;provision of corporate banking and not-for-profit activities(1).AIB Capital Markets plcProvision of asset management,fundmanagement and corporate advi

198、soryservices,including equity investment.AIB Corporate Finance LimitedProvision of corporate advisoryservices to companies includingmerger,acquisition,capital raisingand strategic financial advice.AIB International Financial Services LimitedProvider of outsourced financialservices to international b

199、anks andcorporations.AIB Asset Management Holdings(Ireland)LimitedProvides asset management andfunds services management for institutional and retail clientsthrough its subsidiary companiesAIB Investment Managers Ltd.andAIB Fund Management Ltd.AIB BANK UK DIVISIONAIB Group(UK)p.l.c.31 branches and 1

200、 business development office in Britain,trading as Allied Irish Bank(GB),focused primarily on the mid-corporate business sector.48 branches and outlets in NorthernIreland,trading as First TrustBank,focused on general retail and commercial banking and also assetfinance and leasing.Discontinued operat

201、ions/disposal groupsBank Zachodni WBK S.A.A commercial and retail bank whichoperates through 527 branches and100 agency outlets in Poland.On 10September 2010,AIB announced itsagreement to sell its interest inPoland.The sale completed on 1 April 2011.This interest was heldas a discontinued operation

202、untilcompletion of sale.AmCreditA mortgage lender which operatesthrough three branches in Lithuania,Latvia and Estonia.This investmentis held as a disposal group withincontinuing operations.1.4 Organisational structureAIB Group consists of a number of legal entities,the parent company being Allied I

203、rish Banks,p.l.c.,which has investments in a number of subsidiaries and associated companies.The business of the Group is conducted through its divisional structure which canspan a number of legal entities.Following the requirement to raise additional equity capital by 31 December 2010,certain busin

204、esseswere classified as discontinued operations/disposal groups during the year.These businesses are shown under the headingsDiscontinued operations/disposal groups.The principal legal entities within the divisional structures as well as the more significantbusiness activities are shown below:(1)The

205、 process of winding down the activities of the not-for-profit activities in the US began during 2010.The above subsidiary undertakings are wholly-owned with the exception of Bank Zachodni WBK S.A.(31 December 2010:70.36%).The registered office of each is located in the principal country of operation

206、s for divisional reporting purposes.181.5 CompetitionThe competition among providers of banking services in the areas in which the Group operates has been significantly affected by thechallenging economic environment as well as the crisis in the banking sector.The global banking crisis has reduced t

207、he capacity ofmany institutions to lend and has resulted in the withdrawal of a number of market participants and the consolidation of a significantnumber of competitors.There has also been substantial government intervention in the banking sector in the form of guarantees,recapitalisation and full

208、nationalisation,particularly in the Republic of Ireland and the United Kingdom(“UK”).Republic of IrelandCompetition in retail banking in the Republic of Ireland has undergone a significant transformation in light ofthe recent economic crisis with a resultant change in both operating models and behav

209、iours.The economic crisis and resultant bankingcrisis has lead to both Government and European intervention through Government sponsored bank guarantee schemes,the recapitalisation of many banks operating in Ireland(both domestic and foreign),the nationalisation or substantial Government financialsu

210、pport across the majority of domestic institutions as well as transfer of property related assets to the National Asset ManagementAgency.The focus of competitive activity in retail banking continues to be to provide enhanced credit support to existing customers in particular SMEs as well as to retai

211、n and gather deposits.Deposit pricing continues to be extremely competitive and unsustainable in themedium term.Foreign owned institutions have either withdrawn completely,are in the process of withdrawing through asset holdingcompanies and are no longer providing credit or are scaling back substant

212、ially.The economic downturn has resulted in a fall off in demand for banking products and services in both the personal and businessmarkets.In the personal market,consumers are paying down debt and saving more,reflected in a reduction in national personal creditlevels and an increase in the national

213、 personal savings ratio.Activity in the mortgage market continues to be limited.Through 2010 both domestic and foreign institutions have been realigning their business models in response to the reduceddemand for banking services.UK Competition in the UK banking market has been changed dramatically b

214、y the global economic crisis,and specific issueswith Ireland and Irish banks have had an adverse impact on Irish banks operating in the UK market.Public concern in the UK regarding the stability of the Irish banking system heightened significantly in the second half of 2010 asa result of the downgra

215、ding of both Irish sovereign debt and the debt of Irish banks.Although Irelands state authorities extended theEligible Liabilities Guarantee Scheme,which was put in place to safeguard all deposits with Irelands main banks(including their UKoperations),Irish banks operating in the UK market experienc

216、ed significant deposit withdrawals during the year.The focus of activity in the UK retail deposit market has therefore been on maintaining close relationships with customers inorder to retain existing deposits,and attracting new deposits where possible in a very competitive market.On the credit side

217、,demand for new lending was subdued given the economic climate.Although improving credit conditions werereported during 2010,the increased availability of bank credit appeared to benefit only larger businesses,while many smaller businessesand households continued to experience difficulties in access

218、ing affordable credit,despite the UK Banks requirement to provide creditthrough their Small Business Funds.United StatesSince the disposal of M&T Bank Corporation in November 2010,AIBs presence in the United States has been substantially reduced and is focussed on a specific range of banking activit

219、y.Financial review-1.Business description 191.6 Economic conditions affecting the GroupAIBs activities in Ireland accounted for the majority of the Groups business in 2010.As a result,the performance of the Irish economy is extremely important to the Group.However,the Group also continued to operate

220、 businesses during 2010 in the UnitedKingdom,the Eurozone,Poland and the United States,which means that it is also influenced directly by political,economic andfinancial developments in those economies.Since August 2007,global financial markets have experienced significant volatility and turmoil whi

221、ch have caused a breakdown ofwholesale banking markets,large write-downs among financial institutions,a major change in the banking landscape and a credit crisisthat has extended into some sovereign debt markets.The impact of the financial crisis has been very damaging.According to the IMF,world GDP

222、 fell by 0.6%in 2009,with the advanced economies suffering a decline in real GDP of 3.4%.The world economy has been recovering since around the middle of 2009 and world GDP is forecast by the InternationalMonetary Fund in its World Economic Outlook Update(25 January 2011)to expand by 4.4%in 2011 and

223、 4.5%in 2012,followinggrowth of 5%in 2010.The recovery,though,has been sluggish and uneven in developed economies,where GDP growth is forecastby the IMF at 2.5%for both 2011 and 2012,compared with 3.0%in 2010.According to Irelands Central Statistics Offices(“CSO”)National Income and Expenditure(“NIE

224、”)2009 publication,real GDPin Ireland fell by 3.5%in 2008 and a further 7.6%in 2009.The severity of the 2008/2009 Irish recession was primarily due to theparticularly sharp decline in residential property investment.Based on CSO NIE estimates,new housing output fell by almost 30%in2008,resulting in

225、a negative contribution of 2.5 percentage points to the change in real GDP in that year.A further fall in residentialinvestment of close to 50%in 2009 accounted for another 3.5 percentage points decline in real GDP.National Accounts data published by the CSO for 2010 show that GDP contracted by 1%la

226、st year.Housing remained a significant drag on the economy,knocking a further 2.0 percentage points off GDP last year.Consumer and government spending areestimated to have declined by 1.2%and 2.2%,respectively,in 2010.Exports,though,recovered strongly last year as the world economyregained momentum,

227、rising by 9.4%following a decline of 4.1%in 2009.Due to the very large role played by exports of foreign-owned multinationals in the Irish economy,there is a significant amountof annual profit repatriations which often results in differences in the annual growth in GDP and GNP,since the profits of m

228、ultinationals are not included in GNP.The latter was smaller in absolute terms in 2010,by the equivalent of 19%of nominal GDP.According to the CSO NIE,real GNP fell by 10.7%in 2009 compared to the 7.6%decline in GDP,while in 2010,real GDP fell by1%and real GNP contracted by 2.1%Economic conditions i

229、n the United States,the United Kingdom and the Eurozone,Irelands three most important trading partners,deteriorated sharply in 2008 and the first half of 2009,with all three economies enduring a deep recession.A moderaterecovery in activity has been underway in all three economies since around the m

230、iddle of 2009.US GDP is estimated to have grown by 2.9%in 2010 following a decline of 2.6%in 2009;GDP growth in the United Kingdomis put at 1.3%last year after it fell by 4.9%in 2009,while in the Eurozone,GDP growth is put at 1.7%last year after it fell by over 4%in 2009.(Source:IMF World Economic O

231、utlook Update,25 January 2011).Meanwhile,the Polish economy actually avoided recession but GDP growth did slow to 1.7%in 2009 before recovering to agrowth rate of 3.8%last year(Source:Eurostat 3 March 2011).The economic performance of Poland has been very impressive.It hasbeen helped by its sound fi

232、nancial system,a sharp weakening of the zloty in the second half of 2008,strong FDI flows and the supportive stance of fiscal and monetary policy.Not surprisingly,given the deep recession,labour market conditions have weakened significantly in Ireland since 2007.Employment fell by 1.1%in 2008 and 8.

233、2%in 2009 according to CSO data,and fell by a further 4.2%in 2010.Over half the joblosses are in construction.While the labour force also contracted,CSO data show that the unemployment rate had risen to over 14%by the final quarter of 2010.Ireland retains many of the fundamental factors that support

234、ed strong rates of economic growth in the past two decades(such as ayoung,highly educated labour force,a relatively competitive corporate tax regime,labour market flexibility,access to European andglobal markets and continued inward Foreign Direct Investment(“FDI”).These factors,as well as gains in

235、competitiveness,will becrucial in restoring the economy to a solid growth path over the next number of years.A modest rise in GDP is expected in 2011,helped by a continuing strong performance from exports,with growth picking up thereafter.The forecasts do not take account of the economic and financi

236、al market fallout of recent political risks in the Middle East orNorth Africa and the earthquake in Japan.However,the impact is expected to be limited as most of Irelands current economic difficulties are domestically generated.Much progress is being made in terms of improving competitiveness.Accord

237、ing to the CSO data,the average rate of inflation in2010,as measured by the CPI,was-1.0%following the rate of-4.5%recorded in 2009.The annual rate of inflation as measured by20the harmonised index of consumer prices,which excludes mortgages,was-1.6%in 2010 and-1.7%in 2009.Weak economic activity,a st

238、rong exchange rate against Sterling and the US dollar,increased competitive pressures and declining wages have all contributed tothe decline in prices.The fall in Irish prices has been much more pronounced than in other countries,most notably the UK.The official figures from Eurostat for December 20

239、10 show annual harmonised index of consumer prices inflation at-0.2%in Irelandcompared to+2.2%in the Eurozone and+3.7%in the UK.Higher commodity prices have put upward pressure on inflation everywhere in the opening months of 2011.Meanwhile,the European Commission has estimated that unit wage costs

240、will decline by close to 9%in Ireland in the period2009-2012,while it forecasts that they will rise by 5.0%and 9.5%over the same timeframe in the Eurozone and UK,respectively.The European Central Bank(“ECB”),which regulates monetary policy for the Euro area as a whole,cut the official refinancingrat

241、e to 1%in May 2009 from a peak of 4.25%in July 2008.Rates have been kept on hold at this historically low level since then.However,given the rise in eurozone inflation in early 2011,the ECB has hinted that it may soon increase interest rates.The Irish public finances have deteriorated sharply in rec

242、ent years,moving from an estimated surplus of 2.9%of GDP in 2006 interms of the General Government balance to underlying deficits of 7.3%in 2008,11.9%in 2009 and 11.6%in 2010.The shift tolarge deficits is due to the sharp fall in tax revenues largely associated with the downturn in the Irish housing

243、 market.The Irish budget for 2010 stabilised the underlying deficit at below 12%of GDP and the 2011 budget aims to cut the deficit to around 9.5%ofGDP.Further corrective action will be necessary and the current government has committed to reduce the deficit to below 3%ofGDP by 2015.It should be note

244、d that the actual budget deficit was boosted in both 2009 and 2010 by measures taken by the Irish State torecapitalise the Irish banking system.This boosted the General Government budget deficit to 14.4%of GDP for 2009 and 32%ofGDP in 2010 according to the Department of Finance.The Irish General Gov

245、ernment debt/GDP ratio had fallen steadily from over 95%in 1991 to 25%by 2007(Source:IrelandInformation Memorandum published by the NTMA in March 2008).However,as a result of higher budget deficits and falling levelsof GDP,Irelands General Government debt/GDP ratio is estimated by the Department of

246、Finance to have climbed to 94%of GDPat end 2010,up from 66%in 2009 and 44%in 2008.Yields on Irish Government bonds rose sharply to prohibitive levels in the closing months of 2010-there was a sharp rise inyields on bonds in other peripheral Eurozone countries as well.The Irish banking system also be

247、came highly dependent on ECBfunding.This triggered concerns within the EU about the financing needs of the Irish economy and led to the provision of anIMF/EU loan package for Ireland amounting to 85 billion over three years.However,17.5 billion of this is coming from Irishresources.Some 50 billion o

248、f the package is to meet the Exchequers financing needs,while 35 billion is being made available to boostthe capital levels in Irish banks,although this may not all need to be drawn down.Thus,the Irish State has secured its funding via theEU/IMF facility until 2013.The interest rate on the loans fro

249、m the IMF/EU averages out at 5.8%.This is about 1%higher than theaverage cost of funding for the Irish sovereign over the past two years.However,it is well below the market interest rates on IrishGovernment debt prevailing at the end of 2010 and early 2011.Financial review-1.Business description The

250、 financial information in the tables below for the years ended 31 December 2010,2009,2008,2007 and 2006 has been derivedfrom the audited consolidated financial statements of AIB Group for those periods.AIB Groups consolidated financial statements areprepared in accordance with International Financia

251、l Reporting Standards(“IFRS”)as issued by the International AccountingStandards Board(“IASB”).This information should be read in conjunction with,and is qualified by reference to,the accounting policies adopted,the consolidated financial statements of AIB Group and notes therein for the years ended

252、31 December 2010,2009and 2008 included in this Annual Financial Report.The summary of consolidated income statement re-presents the results of continuing operations,where the results of Bank Zachodni WBK S.A.(“BZWBK”),M&T Bank Corporation and BulgarianAmerican Credit Bank AD as applicable,are accoun

253、ted for as discontinued operations net of taxation for all years presented.Summary of consolidated income statementYears ended 31 December20102009200820072006 m m m m mNet interest income 1,8442,8723,3923,0752,735Other(loss)/income(5,201)1,2347491,005980Total operating income(3,357)4,1064,1414,0803,

254、715Total operating expenses1,6491,5221,8852,1071,981Operating(loss)/profit before provisions(5,006)2,5842,2561,9731,734Provisions7,1185,2671,7499897Operating(loss)/profit(12,124)(2,683)5071,8751,637Associated undertakings18(3)21020Profit on disposal of property46231076365Construction contract income

255、-1125596(Loss)/profit on disposal of businesses(1)(11)-106179(Loss)/profitbefore taxation from continuing operations(12,071)(2,662)6372,0172,197Income tax(income)/expense from continuing operations(1,710)(373)69368401(Loss)/profit after taxation from continuing operations(10,361)(2,289)5681,6491,796

256、Discontinued operations,net of taxation199(45)322420502(Loss)/profit for the period(10,162)(2,334)8902,0692,298Non-controlling interests from discontinued operations(70)(79)(118)(117)(113)Distributions to RCI holders(2)-(44)(38)(38)(38)(Loss)/profit for the period attributable to owners of the paren

257、t(10,232)(2,457)7341,9142,147Basic(loss)/earnings per ordinary/CNV share(5)Continuing operations(571.1c)(203.5c)54.8c178.3c196.6cDiscontinued operations7.1c(11.7c)28.6c40.0c50.2c(564.0c)(215.2c)83.4c218.3c246.8cDiluted(loss)/earnings per ordinary/CNV share(5)Continuing operations(571.1c)(203.5c)54.7

258、c177.3c195.0cDiscontinued operations7.1c(11.7c)28.6c39.5c49.6c(564.0c)(215.2c)83.3c216.8c244.6cDividends-81.8c74.3c67.6c21Financial review-2.Financial data22Selected consolidated statement of financial position data31 December20102009200820072006 m m m m mTotal assets.182xx1 145,222174,314182,174177

259、,888158,526Loans and receivables to banks and customers(3).91,212131,464135,755137,068120,015Deposits by central banks and banks,customer accountsand debt securities in issue.x117,922147,940155,996153,563136,839Dated loan capital.3,9964,2612,9702,6512,668Undated loan capital.197189692813871Other cap

260、ital instruments.1381368641,1411,205Non-controlling interests in subsidiaries.6906261,3441,3511,307Shareholders funds:other equity interests.239389497497497Shareholders equity(4).3,42010,3208,4729,3568,108Total capital resources.8,68015,92114,83915,80914,65631 December20102009200820072006mmmmmShare

261、capital-ordinary sharesNumber of shares outstanding.1,791.6918.4918.4918.4918.4Nominal value of 0.32 per share.573294294294294Share capital-convertible non-voting shares(5)Number of shares outstanding.10,489.9-Nominal value of 0.32 per share.3,357-Share capital-preference sharesUS$non-cumulative pre

262、ference sharesNumber of shares outstanding.-0.250.25Nominal value of US$25 each.-$6.25$6.252009 Preference shares(6)Number of shares outstanding.3,5003,500-Nominal value of 0.01 per share.3535-Financial review-2.Financial dataSelected consolidated statement of financial position data(continued)Other

263、 financial data(7)Years ended 31 December20102009200820072006%Return on average total assets(6.21)(1.29)0.471.221.63Return on average ordinary shareholders equity(222.5)(24.8)8.221.829.0Dividend payout ratio-36.836.329.3Average ordinary shareholders equity as apercentage of average total assets 2.84

264、.34.85.25.2Year end impairment provisions as a percentageof total loans to customers:(3)Total Group7.15.51.70.60.7Continuing operations7.45.51.70.60.7Net interest margin(8)1.491.922.212.142.26Tier 1 capital ratio(9)4.3(10)7.2(10)7.4(10)7.58.2Total capital ratio(9)(11)9.2(10)10.2(10)10.5(10)10.111.1(

265、1)The loss on disposal of businesses in 2010 of 11 million relates to the sale of AIBs investment in Goodbody Holdings Limited and related companies(note 15).The profit on disposal of businesses in 2008 of 106 million relates to a joint venture with First Data Corporation(note 15).The profit on disp

266、osal of businesses in 2006 of 79 million includes profit relating to(a)the transfer by Ark Life of investment managementcontracts pertaining to the sale of Ark Life of 26 million(tax charge Nil);(b)the sale of AIBs 50%stake in AIB/BNY Securities Services(Ireland)Ltd of 51 million(tax charge Nil);and

267、(c)the sale of Ketchum Canada Inc.of 1 million(tax charge Nil)and(d)the accrual of 1 million(taxcharge 0.3 million)arising from the sale of the Govett business in 2003.(2)The distributions in 2009,2008,2007 and 2006 relate to the Reserve Capital Instruments(note 21).(3)Loans and receivables to custo

268、mers includes loans and receivables held for sale to NAMA(note 23).(4)Includes both ordinary shareholders equity,the 3,500 million 2009 Preference Shares issued to the NPRFC in May 2009(note 48)and the convertible non-voting shares issued to the NPRFC on the 23 December 2010(note 55).(5)Convertible

269、non-voting shares issued to the NPRFC on 23 December 2010,rank equally with ordinary shares and are convertible into ordinary shares on a one to one basis(note 48).(6)2009 Preference Shares issued to the NPRFC on 13 May 2009.(7)The calculation of the average balances includes daily and monthly avera

270、ges and are considered to be representative of the operations of the Group.(8)Net interest margin represents net interest income as a percentage of average interest earning assets.The net interest margin for the year ended 31 December 2008 reflects a net interest income figure that was adjusted to r

271、eflect a 365 day year for comparative purposes.The net interest margin is presented on a total Group basis.(9)The minimum total capital ratio set by the EU Capital Requirements Directive is 8%of which the tier 1 element must be at least 4%.The Central Bank of Ireland(the Central Bank)has issued guid

272、elines for implementation of the requirements of the EC Council Directives on own funds,solvency ratios and capital adequacy in Ireland.The Board of Governors of the Federal Reserve System in the US the(Federal Reserve Board)guidelines for risk-based capital requirements,applicable to all bank holdi

273、ng companies,require the minimum ratios of tier 1 capital and total capital to risk adjusted assets to be 4%and 8%respectively.Furthermore,the Federal Reserve Board has adopted leverage capital guidelines requiring bank holding companies to maintain a minimum ratio of tier 1 capital to total quarter

274、ly average assets(tier 1 leverage ratio)of at least 3%,in the case of a bank holding company which has the highest regulatory examination rating and is not contemplating significant growth.All other bank holding companies are expected to maintain a tier 1 leverage ratio at least 1%to 2%above the sta

275、ted minimum.(10)Calculated under Pillar 1(minimum capital requirements)under the Capital Requirements Directive(Financial review-4.Capital management).(11)The Groups regulatory capital position at 31 December 2010 benefited from the following derogations from certain regulatory capital requirements

276、granted by the Central Bank,on a temporary basis,following requests from the Group:-that tier 2 capital cannot exceed tier 1 capital(Regulation 11(1)(a)of the European Communities(Capital Adequacy of Credit Institutions)Regulation 2006(SI No.661 of 2006);and-that lower tier 2 capital cannot exceed 5

277、0%of tier 1 capital(Regulation 11(1)(b)of SI No.661 of 2006).The requirement for this derogation is as a result of loan impairment provisions at 31 December 2010.2324Basis of presentationThe commentary in this management report is on a continuing operations basis unless otherwise stated.For the repo

278、rting of theresults,the Groups continuing operations constitute the businesses AIB operates:AIB Bank ROI division,Capital Markets division,AIB Bank UK division and Group division,(which includes AmCredit,previously reported within the Central and Eastern Europedivision).Capital Markets division prev

279、iously included the results of BZWBK wholesale treasury and certain BZWBK investmentbanking subsidiaries.This business segmentation has been reviewed as part of the restructuring plan of the organisation and the newstructure will be reflected in future business segment reporting.A summary commentary

280、 on discontinued operations is included on page 43.201020092008TotalNAMA(1)TotalTotalTotalexcludingNAMASummary income statement m m m m mNet interest income1,844-1,8442,8723,392Other income(5,201)(5,969)7681,234749Total operating income(3,357)(5,969)2,6124,1064,141Personnel expenses921-9219091,161Ge

281、neral and administrative expenses548-548486586Depreciation(2),impairment and amortisation(3)180-180127138Total operating expenses1,649-1,6491,5221,885Operating(loss)/profit before provisions(5,006)(5,969)9632,5842,256Provisions for impairment of loans and receivables6,015-6,0155,2421,724Provisions f

282、or liabilities and commitments1,0291,029-1(4)Provisions for impairment of financial investments available for sale74-742429Total provisions7,1181,0296,0895,2671,749Operating(loss)/profit(12,124)(6,998)(5,126)(2,683)507Associated undertakings18-18(3)2Profit on disposal of property 46-462310Constructi

283、on contract income-112(Loss)/profit on disposal of businesses(11)-(11)-106(Loss)/profit before taxation-continuing operations(12,071)(6,998)(5,073)(2,662)637Income tax/(income)-continuing operations(1,710)(373)69(Loss)/profit after taxation-continuing operations(10,361)(2,289)568(1)NAMA transfer rel

284、ated losses(see note 7 for further details).(2)Depreciation of property,plant and equipment.(3)Impairment and amortisation of intangible assets.Overview of results2010 was an extremely difficult period for AIB and all its stakeholders.It was a year that culminated in the announcement that theIrish G

285、overnment was to take a majority stake in AIB.There were significant levels of credit losses,as we matched the continueddownturn in the economy,in addition to the loss on transfer of loans to NAMA.On a continuing operations basis,the Group incurred a loss after taxation of 10.4 billion in 2010,compa

286、red with a loss aftertaxation of 2.3 billion in 2009.Operating profit before provisions was 963 million excluding the loss on transfer of assets toNAMA,or a loss of 5.0 billion including the loss on transfer of assets to NAMA,compared to an operating profit before provisionsof 2.6 billion in 2009.Pr

287、ovisions for impairment of loans and receivables were 6.0 billion in 2010 and included 1.5 billionrelated to loans held for sale to NAMA and 4.5 billion for non NAMA loans.There were also provisions for liabilities and commitments of 1.0 billion in relation to loans at 31 December 2010 which had yet

288、 to transfer to NAMA.In total,provisions forcredit deterioration coupled with the NAMA impact amounted to 13 billion in 2010.Higher funding costs were an ongoing issuethroughout 2010.These higher funding costs reflect the increased cost of customer deposits,higher wholesale funding costs and thecost

289、 of the ELG Scheme which in total contributed to a reduction in net interest income.Financial review-3.Management report25Total operating income was negative 3.4 billion in 2010.Excluding the loss on transfer of assets to NAMA,total operating incomewas 2.6 billion.This compares to 4.1 billion in the

290、 year to December 2009,a decrease of 1.5 billion or 36%.Net interestincome was 1.8 billion in 2010 compared to 2.9 billion in 2009,a decrease of 1.1 billion or 36%.The net interest margin was1.31%.Excluding the cost of the ELG Scheme,the net interest margin for 2010 was 1.52%.Operating expenses were

291、 1,649 million in 2010 compared with 1,522 million in 2009,an increase of 127 million.2009 included a gain of 159 million from the retirement benefits amendment.Excluding the impact of this amendment from the cost base in 2009,costsreduced by 32 million or 2%,notwithstanding significant external eng

292、agement,expenditure to address NAMA transition requirements(44 million in 2010;29 million in 2009)and a 59 million writedown of intangible assets in relation to projectsthat were discontinued in 2010.AIB Group total customer accounts as a percentage of funding requirement was 45%at 31 December 2010

293、compared to 51%at31 December 2009.The loan to deposit ratio at 31 December 2010 was 165%compared to 123%at 31 December 2009.Customer accountsdecreased by 22 billion or 29%during 2010 to 52 billion.At 31 December 2010,AIB Groups core tier 1 ratio was 4.0%,tier 1 ratio was 4.3%and total capital ratio

294、was 9.2%.During 2010there were a number of reviews by the Central Bank of Ireland which resulted in a requirement to raise new core tier 1 capital.Thisrequirement was partly achieved(in 2010 and 2011 to date)by generating benefits equivalent to core tier one capital from the disposals of BZWBK(2.5 b

295、illion)and M&T(0.9 billion).On 23 December 2010,AIB received the net proceeds of the IrishGovernment capital injection of 3.7 billion.The following events took place post 31 December 2010 and so had no impact on capital ratios at 31 December 2010,howeverthey have contributed to the capital position

296、since 31 December 2010.A liability management exercise was announced on 24 January2011 which raised 1.5 billion of capital.The immediate transfer of certain deposits and senior NAMA bonds from Anglo Irish Bankand Anglo Irish Bank Corporation(International)p.l.c.in the Isle of Man to AIB by way of a

297、share sale was announced on 24 February 2011.There was a capital contribution of c.1.5 billion arising from this transaction.On 31 March 2011,the CentralBank of Ireland announced the results of the Prudential Capital Assessment Review(“PCAR”).The Central Bank of Ireland requiresAIB to raise capital

298、of 13.3 billion of which an amount of 1.4 billion may be in the form of contingent capital.The Minister forFinance announced,also on 31 March 2011,that it is intended that AIB will be combined with the Educational Building Society(“EBS”),subject to State aid and regulatory approvals required.Outlook

299、 statementAIBs long term future as a viable bank has been validated by the commitment of state authorities to support the bank.This commitment is being given because it is accepted that AIB is of systemic importance to the domestic economy and Irelands futureeconomic success requires a properly func

300、tioning banking system.The very strong capital base that will result from the generation of 13.3 billion of capital will enable AIB to provide long term support to its customers and play an active role in the recovery of theIrish economy.It is intended to combine AIB and EBS(subject to State aid and

301、 regulatory approvals)to form one of two new stronguniversal pillar banks in Ireland.Business and market conditions remain challenging and the environment for operating income generation remains difficult.This requires costs to be lowered.It is expected that a reduction of over 2,000 staff will take

302、 place on aphased basis over 2011 and 2012.A core bank,in line with AIBs new strategic direction will be established with a restructured balance sheet achieved through the disposal and winding down of non-core assets.This new AIB will form a strong foundation fromwhich a profitable business can be r

303、ebuilt.The speed at which AIB recovers and returns to a position of profitability and self-capitalisation is heavily influenced by Irelands economic prospects.Net interest income201020092008(1)Net interest income m m mNet interest income1,8442,8723,39220102009Average interest earning assets-continui

304、ng operations m mAverage interest earning assets141,093156,43920102009Net interest margin%Group net interest margin1.311.84Group interest margin excluding ELG1.521.84(1)Although,the statement of financial position for prior periods has not been represented for continuing and discontinued operations,

305、a continuing average interest earning assets figure and Net interest margin for 2009 only have been presented for comparative purposes(see note 68 for Average Balance Sheet on a Group basis).262010 v 2009Net interest income was 1,844 million in 2010 compared with 2,872 million in 2009,a decrease of

306、1,028 million or 36%.Net interest income for 2010 included a charge for the ELG Scheme of 306 million(1)excluding which net interest income reducedby 722 million or 25%.The net interest income decrease excluding the ELG cost mainly reflected the significantly increased cost of customer deposits ina

307、marketplace with elevated deposit pricing,higher wholesale funding costs and lower income on capital.There was also lower incomefrom loans reflecting the transfer of loans to NAMA and lower earning loan balances partly offset by higher loan margins on newlending.The net interest margin was 1.31%.Exc

308、luding the cost of the ELG Scheme,the net interest margin for 2010 was 1.52%.This wasa reduction of 53 basis points or excluding the ELG Scheme 32 basis points compared with 1.84%in 2009.The estimated(2)factorscontributing to the movement in the margin of-32 basis points were:-20 basis points due to

309、 lower deposit income,-19 basis pointsdue to lower capital income,-14 basis points due to higher wholesale funding costs partly offset by+10 basis points due to improvedlending margins and+11 basis points impact from treasury/other net interest income.2009 v 2008Net interest income was 2,872 million

310、 in 2009 compared to 3,392 million in 2008,a reduction of 520 million or 15%.Weak demand for credit resulted in loans being lower than 2008.Gross loans to customers reduced by 3 billion(includingNAMA loans)and customer accounts decreased by 9 billion since 31 December 2008(details of loan and deposi

311、t growth by division are contained on page 44).The decrease in net interest income mainly reflected the significantly increased cost of customer deposits in a highly competitivemarketplace,higher wholesale funding costs and a lower return on invested capital partly offset by higher loan margins and

312、a highertreasury margin.(1)The aggregate charge for CIFS Scheme and the ELG Schemes was 357 million(ELG 306 million and CIFS Scheme 51 million)compared toa CIFS Scheme charge of 147 million for 2009.The CIFS Scheme charge is reflected in other income,while the ELG Scheme charge is in net interestinc

313、ome.(2)Management estimate.Other incomeThe following table shows other income for the years ended 31 December 2010,2009 and 2008.201020092008TotalNAMA(1)TotalTotalTotalexcludingNAMAOther income m m m m mDividend income1-147Banking fees and commissions486-486526608Investment banking and asset managem

314、ent fees99-99110120Fee and commission income585-585636728Irish Government guarantee scheme expense(“CIFS”)(51)-(51)(147)(29)Other fee and commission expense(37)-(37)(37)(47)Less:Fee and commission expense(88)-(88)(184)(76)Trading loss(188)-(188)(12)(113)Interest rate hedge volatility(13)-(13)(28)27N

315、et trading loss(2)(201)-(201)(40)(86)Gain on redemption of subordinated liabilities372-372623-Loss on disposal of loans(54)-(54)-Other operating income153-153195176Other operating income99-99195176Other income excluding NAMA loss768-7681,234749Loss on transfer of financial instruments to NAMA(5,969)

316、(5,969)-Other(loss)/income(5,201)(5,969)7681,234749(1)Loss on transfer of financial instruments held for sale to NAMA.(2)Trading loss includes foreign exchange contracts,debt securities and interest rate contracts,credit derivative contracts,equity securities and index contracts(see note 5).Financia

317、l review-3.Management report 272010 v 2009Other income was a negative 5.2 billion in 2010,which included a loss of 6.0 billion on the transfer of assets to NAMA and a 372 million gain on redemption of subordinated liabilities from the capital exchange offering in 2010.Excluding these items otherinco

318、me was 396 million,compared with 611 million in 2009(excluding the 623 million gain on redemption of subordinatedliabilities from the capital exchange offering in 2009),a decrease of 215 million or 35%.This decrease reflected weaker economic conditions,challenging trading markets in which AIB operat

319、es,lower business volumesand lower revenues from investment banking activities.The decline of these other income elements was partly offset by lower depositguarantee costs for theCIFS Scheme booked through other income.Banking fees and commissions decreased by 8%reflecting lower business volumes and

320、 activity.Investment banking and asset management fees were down 10%in 2010 mainly reflecting lower brokerage income in theRepublic of Ireland.Fee and commission expense includes the cost of theCIFS Scheme of 51 million in 2010.The cost of the ELG Scheme of 306 million in 2010 is included in net int

321、erest income.Trading losses were 201 million in 2010 compared to 40 million in 2009.Trading loss excludes interest payable and receivable arising from hedging and the funding of trading activities,which are included in interest income and by reclassification ofincome between other income and net int

322、erest income.During 2010 there was an increase in the trading loss recorded in otherincome with a related increase in net interest income.On a total income basis(net interest income and other income),income fromtrading activities was broadly in line with 2009.Other operating income in 2010 was 99 mi

323、llion compared with 195 million in 2009.Other operating income in 2010included 75 million from the disposal of available for sale debt securities compared with 167 million in 2009,a reduction of 92 million.In 2010 there was a loss of 54 million on the disposal of loans as part of asset deleveraging

324、measures.Partly offsettingthese reductions was an increase in foreign exchange gains of 21 million.2009 v 2008Other income was 1,234 million in 2009 which included a 623 million gain on redemption of subordinated liabilities from thecapital exchange offering.Excluding this gain other income was 611

325、million,compared with 749 million in 2008,a decrease of 138 million or 18%.This reflected weaker economic conditions in the markets in which AIB operated,lower revenues from investment banking andwealth management activities,the 147 million cost of the CIFS Scheme in 2009(29 million in 2008)and the

326、negative impact ofinterest rate hedge volatility between 2008 and 2009 of 55 million.The decline of these other income elements were partly offsetby higher trading income and profit on disposal of available for sale debt securities.Banking fees and commissions of 526 million decreased by 82 million

327、or 13%reflecting lower business volumes and activity.Investment banking and asset management fees were down 10 million or 8%in 2009.The increase in fee and commission expense was due to the cost of the Irish Government guarantee scheme where 2009 has thefull year costs of the scheme compared with a

328、one quarter charge in 2008.Trading losses were negative 12 million in 2009.Trading losses excludes interest payable and receivable arising from hedgingand the funding of trading activities,which are included in net interest income.Trading losses in 2009 reflected a more positive fairvalue impact on

329、bond assets than 2008 which experienced more difficult trading conditions and the reclassification of assets as available for sale in 2008.In 2009 there was a fair value charge of 73 million to trading income in relation to the structured securities portfolio,while the charge was 53 million in 2008.

330、Other operating income in 2009 was 195 million compared with 176 million in 2008.Profit from the disposal of availablefor sale debt securities of 167 million was recorded in 2009.2008 included 74 million profit on disposal of available for sale debtsecurities and profit on disposal of available for

331、sale equity shares of 56 million,including the sale of Visa and MasterCard shares.28Total operating expenses201020092008Operating expenses m m mPersonnel expenses9219091,161General and administrative expenses548486586Depreciation,(1)impairment and amortisation(2)180127138Total operating expenses 1,6

332、491,5221,885(1)Depreciation of property,plant and equipment.(2)Impairment and amortisation of intangible assets.2010 v 2009Total operating expenses were 1,649 million in 2010,an increase of 127 million or 8%when compared to 1,522 million in2009.In 2009 there was a gain of 159 million from an amendme

333、nt to retirement benefits,excluding which costs decreased by 32 million or 2%.Total operating expenses in 2010 included costs of 44 million relating to NAMA compared with 29 millionin 2009.When these costs are excluded the cost base decreased by 47 million or 3%.This decrease reflected cost management in aperiod of slower economic conditions,lower staff numbers and reduced business activity.These