AIB said it is proposing to pay out €2.25 billion to shareholders after posting better-than-expected results, and plans to more than quadruple chief executive Colin Hunt’s remuneration over time after the bank returned to full private ownership last year.
The bank is proposing a €988 million final dividend on last year’s earnings, coming in addition to €263 million interim payment to shareholders in November, it said a statement on Wednesday. It has also secured regulatory approval for a €1 billion share buyback programme, to be launched immediately.
It follows the posting of a net profit of €2.14 billion. The result was down from €2.35 billion posted in 2024, as net interest income declined 9 per cent to €3.75 billion amid falling official interest rates. Still, net interest beat management’s own upgraded guidance from November for a figure in excess of €3.7 billion.
Benjamin Toms, an analyst with RBC Capital in London, noted that the bank’s underlying €1.17 billion pretax profit for the second half of the year beat consensus estimates by 7 per cent.
Shares in the group rose by 1.9 per cent in early trading in Dublin.
The bank also outlined plans to hike Hunt’s pay package after fixed-salary restrictions were lifted by the Government last summer as it sold its remaining shares in the group.
Hunt’s annual salary was immediately hiked to €795,000 from €500,000, effective from last August, before being increased again in January, to €1.35 million to “to be much more closely aligned to market norms”, AIB said in its annual report.
The bank also revealed that it will be using fixed share awards – with no performance conditions attached – to get around an ongoing ban on bonuses above €20,000 across Irish banks. These will be set at a maximum of 100 per cent of salary over time, with the precise structure of the plan published.
On reaching the maximum stock award, his remuneration would hit €2.7 million, 5.4 times his pay for 2024.
Looking ahead, AIB expects its net interest income to grow to €3.88 billion this year and other income to be greater than €750 million. Other income came to €756 million in 2025.
“Notwithstanding geopolitical uncertainty, our focus remains on completing the final year of our current strategic cycle and planning for the future with confidence, underpinned by the trust placed in us by our 3.4 million customers and their communities whilst delivering sustainable returns to our shareholders,” said Hunt.
Gross loans last year rose by 3 per cent, to meet management expectations, with a strong showing by the group’s international climate capital business in the fourth quarter helping to reach the target. Loan growth had been running at only 1.2 per cent over the first nine months of the year.