anglo interim results 2005

8/13/2019 Anglo Interim Results 2005

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Business Lending Treasury Wealth Management

E X P E R I E N C E T H E D I F F E RE N C E

Anglo Irish Bank

Interim Report 2005six months ended 31 March 2005


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C ontents01 Financial highlights

02 C hairmansstatement

06 C onsolidated profit and loss account

07 C onsolidated balance sheet

08 C onsolidated cash flow statement

09 Statement of total recognised gains and losses

09 Reconciliation of movements in shareholders funds

09 Reconciliation of movementsin retained profits

10 N otes to the interim report

11 A ccountsin U SD, G BP and CH F

13 A nglo Irish Bank locations

D irectorsSean FitzPatrick (Chairman)David Drumm (Chief Executive)Lar Bradshaw

Tom BrowneFintan DruryMichael JacobPatricia JamalWilliam McAteerGary McGann

John RowanNed SullivanPatrick WrightSecretary:Bernard Daly


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Anglo Irish Bank Interim Report 2005

01

Financial highlights

Excellent performance in the six months ended 31 March 2005

Reported pre-tax profits of 308.4m, an increase of 35%

Record EPS of 66.7c, up 30%

Cost/income ratio stands at 27%

Return on equity of 33%

Lending balances up 18% in the six month period

Total assets of 40Bn

Tier 1 Capital Ratio is 8.2%


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02

I am pleased to announce an excellent performance by Anglo Irish Bank for the six months ended 31 March2005,continuing the Groups record of strong profit growth.Profits for the period were 308.4m,resultingin a 30%increase in earnings per share.Each of our divisions has performed strongly during this time.

Once again these results demonstrate the inherent strength of the Banks strategy which continues to deliverexcellent returns to shareholders.

The performance highlights for the period include:

Profits

Reported pre-tax profits of 308.4m,an increase of 35% Record EPS of 66.7 cent,an increase of 30% Cost/income ratio stands at 27%

Shareholder value Return on equity of 33% 20%increase in interim dividend

Operational performance Record growth in lending of 4.3Bn,an increase of 18%in

the six month period Continuing excellent asset quality with non-performing loans

representing 0.55%of closing customer loan balances Total funding increased by 19%to 34.5Bn Tier 1 Capital Ratio is 8.2% Number of employees grew by 17%year on year to 1,315 Lending work in progress is 4.9Bn

The momentum in our business,combined with the ongoingsignificant investment in our people, augurs well for the Group.

Dividends The Board has declared an interim dividend of 4.51 cent pershare, an increase of 20%on the interim dividend paid in 2004when allowance is made for the two-for-one share split on22 April 2005. The dividend will be paid on 18 July 2005 toshareholders on the Bank s register as at the close of businesson 13 May 2005. Withholding tax may apply on the dividenddepending on the tax status of each shareholder. Shareholderswill again be offered the option of receiving dividends in theform of cash or shares.

Business LendingBusiness lending achieved net loan growth of 4.3Bn on aconstant currency basis, the strongest performance in any sixmonth period in the Banks history. This follows a net increaseof 6.3Bn in the full year to 30 September 2004. Total loanbalances now stand at 28.7Bn. This growth has been achievedacross all markets with our Irish,UK and US operationsdelivering net increases of 19%,15%and 26%respectively.

This is a clear reflection of our growing presence and franchisein our target sectors and chosen markets. Lending margins have

remained stable and most importantly,asset quality remainsexcellent. Non-performing loans equate to 0.55%of closingloan balances.

C hairmans statement

Sean FitzPatrickChairman


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03

TreasuryOur Treasury division has delivered significant value to theGroup in this period. Total funding increased by 5.5Bn on aconstant currency basis to 34.5Bn,up 19%. Customer depositsgrew by nearly 3Bn net to 22.5Bn. In an increasinglycompetitive environment,this excellent result demonstrates thesuccess of the Banks product offering and customer service focus.

Operating in Ireland,the UK and the USA,our Corporate Treasury Sales business produced very strong growth,withrevenues up from 19m to 30m. We have invested

significantly in building a high calibre team that understands therisks faced by our clients and accordingly,can offer appropriateand innovative solutions to manage their foreign exchange andinterest rate exposures.

Wealth ManagementWealth Management delivered excellent results in the first half,with revenue growth of 16%to 44m. All areas of the divisionmade strong progress and delivered higher profits. This growingbusiness provides an excellent fit within the Group enabling usto better service the overall needs of our client base.

PeopleOn behalf of my colleagues and myself, I wish again to expressour deepest gratitude to Peter Murray who retired as the BanksChairman and from the Board in January 2005. Peter brought a

wealth of experience to our Board since his appointment in1993. The Bank has benefited immensely from Petersinvolvement over the past 12 years and from his leadershipduring his tenure as Chairman.

We invested significantly in our people in 2004 and continuedthis into 2005. The Group currently employs in excess of 1,300people representing 17%year on year growth. The recruitmentof talented people, together with our broader investment intraining and development, ensures that we can continue to growour business and enhance the service we provide to customers.

Notwithstanding this significant ongoing investment, the inherentstrength and effectiveness of the Banks model results in a highlyefficient cost/income ratio of 27%.

International Financial Reporting Standards (IFRS)In line with all European Union listed institutions, Anglo IrishBank is required to adopt new reporting standards foraccounting periods commencing on or after 1 January 2005.

The Groups first full reporting period under these new

standards will be the year to 30 September 2006. Our resultsfor the six months to 31 March 2005 are prepared under Irishgenerally accepted accounting practices (Irish GAAP) as will theresults for the year to 30 September 2005.

Once again these results demonstrate the inherent strength of

the Banks strategy which continues to deliver excellent returns

to shareholders.


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04

If prepared under IFRS,we estimate that EPS for the six monthsto 31 March 2005 would have been circa 4%lower than underIrish GAAP. The impact on our Tier 1 regulatory capital isexpected to be marginally positive.

The application of IFRS does not alter the Groups economicsubstance,nor the cash flows generated by our business.Theimpact is mainly due to the effect of first time adoption andtiming differences in the recognition of income and expense.

Business FocusOur fundamental business strategy and focus remain unchanged.Maintaining this proven strategy will,we believe,enable the Bankto consistently deliver significant growth in shareholder valueover time.

The Bank will continue to focus on its core businesses in itsexisting markets. We have built strong franchises in our chosenmarkets and we will continue to take advantage of the growthopportunities that they will provide over the coming years.We will remain vigilant on all risk issues and asset quality.

The Boards strategic objectives are based on organic growth.We will evaluate acquisition opportunities as they arise,but willonly proceed with those that satisfy our long-term strategicobjectives and meet the stringent criteria we impose.

Outlook Your Board is confident of the Banks prospects for theremainder of the year. Lending work in progress at 31 March2005 was at record levels at 4.9Bn.In addition, the Groups

Treasury and Wealth Management divisions continue to expandand increase their contribution to the Groups performance.

The outlook for the Irish and UK economies,which are core to

us,remains positive and the strength of the Banks presence ineach market positions us well for future growth.

I look forward to a strong performance in the full year toSeptember 2005 and beyond.

Sean FitzPatrickChairman 3 May 2005


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05

The momentum in our business,combined with the ongoing

significant investment in our people,augurs well for the Group.


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06

Consolidated profit and loss account ( unaudi ted)FOR THE SIX MO NT HS ENDED 31 MARCH 2005

6 months 6 months yearended ended ended

31 March 31 March 30 September2005 2004 2004

m m m

Interest receivable and similar incomeInterest receivable and similar income arising fromDebt securities and other fixed income securities 42.1 22.2 50.4Other interest receivable and similar income 904.0 610.6 1,402.5Interest payable and similar charges (621.9) (390.2) (929.4)Net interest income 324.2 242.6 523.5

Other incomeFees and commissions receivable 110.6 86.8 183.9

Fees and commissions payable (8.7) (7.8) (16.3)Dealing profits 7.7 7.0 12.8Other operating income 8.4 5.1 19.3Total operating income 442.2 333.7 723.2

Operating expensesAdministrative expenses 112.4 88.8 185.4Depreciation and goodwill amortisation 6.8 6.7 14.6Provisions for bad and doubtful debts - specific 14.6 9.6 19.1

133.8 105.1 219.1

Group profit on ordinary activities before taxation 308.4 228.6 504.1

Taxation on profit on ordinary activities (61.9) (50.6) (107.7)Group profit on ordinary activities after taxation 246.5 178.0 396.4

Minority interests (23.7) (8.2) (17.0)Group profit attributable to ordinary shareholders 222.8 169.8 379.4

Dividends (30.4) (25.0) (75.2)

Group profit retained for period 192.4 144.8 304.2

Basic earnings per share 66.70c 51.42c 114.53c

Diluted earnings per share 65.32c 50.42c 112.37c

Dividends per ordinary share 4.51c 3.76c* 11.28c *

*Adjusted for two-for-one share split on 22 April 2005.See notes to the interim report on page 10.


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07

Consolidated balance sheet ( unaudi ted)AS AT 31 MARCH 2005

31 March 30 September 31 March2005 2004 2004

m m m

AssetsLoans and advances to banks 5,900.9 6,210.6 6,710.8Loans and advances to customers 28,250.8 23,723.8 20,511.0Securitised assets 422.4 666.0 789.9Less:non-returnable proceeds (406.9) (634.8) (757.2)

15.5 31.2 32.7Debt securities 3,962.6 2,534.4 1,635.3Equity shares 32.8 26.1 6.8Intangible fixed assets - goodwill 67.6 69.6 72.0

Tangible fixed assets 64.5 59.4 32.0Other assets 443.5 577.7 491.4Prepayments and accrued income 357.1 439.4 336.3

39,095.3 33,672.2 29,828.3Life assurance assets attributable to policyholders 837.0 667.6 548.5

Total assets 39,932.3 34,339.8 30,376.8

LiabilitiesDeposits by banks 4,114.6 2,605.9 2,915.0Customer accounts 22,501.8 19,546.0 17,376.9Debt securities in issue 7,896.3 6,944.5 6,453.7

Other liabilities 319.4 305.7 266.2Accruals and deferred income 343.7 392.0 386.3Provisions for liabilities and charges 5.3 5.4 4.8

35,181.1 29,799.5 27,402.9

Capital resourcesSubordinated liabilities 1,116.6 1,133.3 421.1Perpetual capital securities 654.7 656.2 676.7Equity and non-equity minority interests 683.8 843.4 255.4

2,455.1 2,632.9 1,353.2Called up share capital 108.1 107.1 106.7Share premium account 166.8 157.6 156.9Other reserves 0.9 0.9 0.9Profit and loss account 1,183.3 974.2 807.7

Total shareholders funds (all equity interests) 1,459.1 1,239.8 1,072.2 Total capital resources 3,914.2 3,872.7 2,425.4

39,095.3 33,672.2 29,828.3Life assurance liabilities attributable to policyholders 837.0 667.6 548.5

Total liabilities and capital resources 39,932.3 34,339.8 30,376.8

Memorandum items

Contingent liabilitiesGuarantees 1,398.9 910.4 801.6CommitmentsCommitments to lend 4,935.7 4,055.0 3,416.0


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08

Consolidated cash flow statement ( unaudi ted)FOR THE SIX MO NT HS ENDED 31 MARCH 2005



m m m

Reconciliation of operating profit to net operating cash flowsOperating profit 308.4 228.6 504.1(Decrease)/increase in accruals and deferred income (58.2) 108.0 124.8Decrease/(increase) in prepayments and accrued income 85.7 (78.8) (178.6)Financing costs of subordinated liabilities 22.3 13.7 32.2Financing costs of perpetual capital securities 26.3 27.2 52.8Interest earned on debt securities and other fixed income securities (38.5) (21.6) (48.3)Amortisation of debt securities and other fixed income securities (3.6) (0.6) (2.1)Provisions for bad and doubtful debts 14.6 9.6 19.1

Loans and advances written off net of recoveries (4.4) (3.7) (11.7)Depreciation and goodwill amortisation 6.8 6.7 14.6Net cash flow from trading activities 359.4 289.1 506.9

Net increase in deposits 5,416.3 4,320.0 6,670.8Net increase in loans and advances to customers (4,521.5) (3,250.2) (6,463.0)Net decrease/(increase) in loans and advances to banks 251.5 (777.4) (1,573.0)Net decrease/(increase) in other assets 139.3 (72.1) (160.1)Net increase/(decrease) in other liabilities 20.1 (23.8) (8.2)Exchange and other movements (8.6) 22.0 (1.6)

Net cash flow from operating activities 1,656.5 507.6 (1,028.2)

Returns on investment and servicing of finance (26.9) (17.2) (57.2) Tax paid (48.0) (44.7) (104.1)Capital expenditure and financial investment (1,441.2) (275.3) (1,225.5)Acquisitions and disposals - deferred consideration paid (5.8) - -Equity dividends paid (31.0) (32.3) (49.9)Financing (161.8) (3.5) 1,303.7(Decrease)/increase in cash (58.2) 134.6 (1,161.2)


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09

Statement of total recognised gains and losses ( unaudi ted)FOR THE SIX MO NT HS ENDED 31 MARCH 2005



m m m

Group profit attributable to ordinary shareholders 222.8 169.8 379.4Prior period adjustment - own shares - (6.2) (6.2)

Total recognised gains 222.8 163.6 373.2

Reconciliation of movements in shareholders funds ( unaud i ted )FOR THE SIX MO NT HS ENDED 31 MARCH 2005

m m m

Group profit attributable to ordinary shareholders 222.8 169.8 379.4Dividends on equity shares (30.4) (25.0) (75.2)

192.4 144.8 304.2Ordinary shares issued in lieu of cash dividends 19.2 13.6 21.0Other ordinary share capital issued 10.2 3.1 4.2Net movement in own shares (2.5) (0.5) (0.8)Net addition to shareholders funds 219.3 161.0 328.6Opening shareholders funds 1,239.8 911.2 911.2Closing shareholders funds 1,459.1 1,072.2 1,239.8

Reconciliation of movements in retained profits ( unaud i ted )FOR THE SIX MO NT HS ENDED 31 MARCH 2005

m m m

At beginning of the period 974.2 649.8 649.8Group profit retained for period 192.4 144.8 304.2Ordinary shares issued in lieu of cash dividends 19.2 13.6 21.0Net movement in own shares (2.5) (0.5) (0.8)At end of the period 1,183.3 807.7 974.2


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10

N otes to the interim reportFOR THE SIX MO NT HS ENDED 31 MARCH 2005

Basis of preparation

The interim financial statements for the six months ended 31 March 2005 have been prepared in accordance with the accountingpolicies set out in the annual report for the year ended 30 September 2004.

Taxation 6 months 6 months yearended ended ended


m m m

Irish Corporation Tax 27.5 21.0 37.1Irish Bank Levy 2.6 2.6 5.2Foreign tax 36.8 26.5 65.7Deferred tax (5.0) 0.5 (0.3)

61.9 50.6 107.7

Financial statements for the year ended 30 September 2004

The full financial statements for the year ended 30 September 2004 received an unqualified auditors opinion and have been filed

with the Registrar of Companies in Ireland.

Share split

On 4 April 2005 Anglo Irish Bank Corporation plc (the Company) announced that,having received approval from itsshareholders at an Extraordinary General Meeting held on 28 January 2005,the Board of Directors proposed to sub-divide eachexisting ordinary share of 0.32 in the share capital of the Company into two ordinary shares of 0.16 each,thereby doublingthe number of shares in issue. This sub-division was effective from the close of business on 22 April 2005.

Adjusting for the share split, basic earnings per share and diluted earnings per share for the six months ended 31 March 2005 will

be 33.35 cent and 32.66 cent respectively reflecting the doubling of the number of shares in issue. The prior period comparativeswill be similarly restated to one half of the amounts previously reported.


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11

Consolidated profit and loss account ( unaudi ted)FOR THE SIX MO NT HS ENDED 31 MARCH 2005

USDm GBPm CHFm

Interest receivable and similar incomeInterest receivable and similar income arising fromDebt securities and other fixed income securities 54.6 29.0 65.2Other interest receivable and similar income 1,171.9 622.4 1,399.9Interest payable and similar charges (806.2) (428.2) (963.0)Net interest income 420.3 223.2 502.1

Other incomeFees and commissions receivable 143.3 76.1 171.3Fees and commissions payable (11.3) (6.0) (13.5)Dealing profits 10.0 5.3 11.9Other operating income 10.9 5.8 13.0Total operating income 573.2 304.4 684.8

Operating expensesAdministrative expenses 145.7 77.4 174.1Depreciation and goodwill amortisation 8.8 4.7 10.5Provisions for bad and doubtful debts - specific 18.9 10.0 22.6

173.4 92.1 207.2

Group profit on ordinary activities before taxation 399.8 212.3 477.6

Taxation on profit on ordinary activities (80.3) (42.6) (95.9)Group profit on ordinary activities after taxation 319.5 169.7 381.7

Minority interests (30.7) (16.3) (36.7)Group profit attributable to ordinary shareholders 288.8 153.4 345.0

Dividends (39.4) (20.9) (47.0)Group profit retained for period 249.4 132.5 298.0

Basic earnings per share 86.47c 45.92p Chf 1.03

Diluted earnings per share 84.68c 44.97p Chf 1.01

Dividends per ordinary share 5.85c 3.11p Chf 0.07

Exchange rates used at 31 March 2005One Euro =USD 1.2964 / GBP 0.6885 / CHF 1.5486


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Consolidated balance sheet ( unaudi ted)AS AT 31 MARCH 2005

USDm GBPm CHFm

Assets

Loans and advances to banks 7,650 4,063 9,138Loans and advances to customers 36,624 19,451 43,749Securitised assets 548 291 654Less:non-returnable proceeds (528) (280) (630)

20 11 24Debt securities 5,137 2,728 6,136Equity shares 42 23 51Intangible fixed assets - goodwill 88 46 105

Tangible fixed assets 84 44 100Other assets 575 305 687Prepayments and accrued income 463 246 553

50,683 26,917 60,543Life assurance assets attributable to policyholders 1,085 576 1,296

Total assets 51,768 27,493 61,839

LiabilitiesDeposits by banks 5,334 2,833 6,372Customer accounts 29,171 15,492 34,846Debt securities in issue 10,237 5,436 12,228Other liabilities 414 220 495Accruals and deferred income 446 237 532

Provisions for liabilities and charges 7 4 845,609 24,222 54,481

Capital resourcesSubordinated liabilities 1,447 769 1,729Perpetual capital securities 849 451 1,014Equity and non-equity minority interests 886 470 1,059

3,182 1,690 3,802Called up share capital 140 74 168Share premium account 217 115 258Other reserves 1 1 1Profit and loss account 1,534 815 1,833

Total shareholders funds (all equity interests) 1,892 1,005 2,260 Total capital resources 5,074 2,695 6,062

50,683 26,917 60,543Life assurance liabilities attributable to policyholders 1,085 576 1,296

Total liabilities and capital resources 51,768 27,493 61,839

Exchange rates used at 31 March 2005One Euro =USD 1.2964 / GBP 0.6885 / CHF 1.5486


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DublinHead OfficeStephen Court18/21 St.Stephens GreenDublin 2

Tel +353 1 616 2000Fax +353 1 616 2411www.angloirishbank.com

Registrar correspondence

Computershare InvestorServices (Ireland) LimitedHeron HouseCorrig RoadSandyford Industrial EstateDublin 18

Tel +353 1 216 3100Freephone +353 1 800 225 125(Shareholder enquiries)www.computershare.com

InternationalFinancial ServicesCustom House PlazaIFSCDublin 1

Tel +353 1 670 2388Fax +353 1 670 2384

Private Banking61 Fitzwilliam SquareDublin 2

Tel +353 1 631 0000Fax +353 1 631 0098

Cork Anglo Irish Bank House

11 Anglesea StreetCork

Tel +353 21 453 7300Fax +353 21 453 7399

GalwayAnglo Irish Bank HouseForster StreetGalway

Tel +353 91 536 900Fax +353 91 536 932

Limerick Anglo Irish Bank House98 Henry StreetLimerick

Tel +353 61 461 800Fax +353 61 461 899

WaterfordBank House96 The Quay

Waterford Tel +353 51 849 300Fax +353 51 849 398

Banbury Town Centre HouseSoutham RoadBanburyOxon OX16 2EN

Tel +44 1295 755 500Fax +44 1295 755 510

Belfast14/18 Great Victoria StreetBelfast BT2 7BA

Tel +44 2890 333 100Fax +44 2890 269 090

BirminghamEmbassy House60 Church StreetBirmingham B3 2DJ

Tel +44 121 232 0800Fax +44 121 232 0808

Glasgow180 St.Vincent Street

Glasgow G2 5SG Tel +44 141 204 7270Fax +44 141 204 7299

London10 Old JewryLondon EC2R 8DN

Tel +44 207 710 7000Fax +44 207 710 7050

Manchester1 Marsden StreetManchester M2 1HW

Tel +44 161 214 3020Fax +44 161 214 3030

Isle of Man Jubilee BuildingsVictoria StreetDouglas

Isle of Man IM1 2SH Tel +44 1624 698 000Fax +44 1624 698 001

Geneva7 Rue des AlpesP.O. Box 13801211 Geneva I

Tel +41 22 716 3636Fax +41 22 716 3619

ViennaRathausstrasse 20P.O. Box 306A-1011 Vienna

Tel +43 1 406 6161Fax +43 1 405 8142

Boston(Representative Office)265 Franklin StreetBoston MA 02110

Tel +1 617 720 2577Fax +1 617 720 6099

New York (Representative Office)

222 East 41st StreetNew York NY 10017

Tel +1 646 495 5229Fax +1 646 495 5231

A nglo Irish Bank locations

Designed and produced by Designbank Ltd.,Tel:6604177


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