600 staff have departed from AIB, and it expects a "lower cost base" going forward
The market's been anticipating AIB's interim management statement for most of Friday, and now you can see why they left it so late - €13bn in customer deposits fallen by the wayside, loans down by 6%, a reliance on ECB funding and a need to increase its capital raising targets by over €1bn.
Oh, and 600 staff have departed during the year.
Not much there to reassure AIB staff that the rumours of thousands of coming redundancies circulating in June were completely unfounded.
The 600 departures were no doubt a result of the bank's policy of not replacing departing employees, combined with some initial fallout from the sale of its Polish operations. Still, the following line (as cryptic as it is) will not be pleasing for AIB employees, particularly as its UK operation is staying put for the foreseeable future:
A lower cost base aligned with the bank's reduced size is a key part of our plans to improve the future performance of the bank. As already stated, these plans are currently under review and details, including details of a cost reduction programme, will be published in due course.
The bank says it expects profits to be down on 2009, in each of its divisions, but didn't give a specific estimate.
AIB is facing many of the same problems as Bank of Ireland - an exodus of corporate deposits and increased difficulty securing funding, which has required it to tap ECB liquidity facilities.
However, its outflows are greater - €13bn, compared to €10bn at BoI - and its loan to deposit ratio now stands at 159%.
All of this makes it decidedly harder for it to reach the €10.4bn capital requirement target set by the Central Bank of Ireland. AIB therefore aims to raise its planned capital raising from €5.4bn to €6.6bn, and hopes to cash in €3.1bn from the sale of its Polish unit.
The bank adds:
While we continue to operate in an exceptionally challenging funding environment, our funding and liquidity positions have been positively affected by specific recent events and will be further positively impacted by events expected to occur over the coming months.
