- Allied Irish Bank swung to a net profit in the first half of the year an improved macro-environment led to impairment credit compared with a charge a year earlier.

Net profit was €274 million, compared with a loss of €0.7 billion last year, with the company attributing the return to profit to 'solid income performance and focused cost management'

Net interest income fell 9% to €881 million from €967 million, though improved from a 13% decline in Q1 and was 'on track for a moderate decline for the full year as guided,' the company said.

Net interest margin for H1 2021 was 1.66% , down from 2.10% last year.

The bank reported net credit impairment writeback of €103 million compared with €1.2bn charge due to a 'more favourable economic environment and improved credit quality.'

In the first half of the year the impact of the lower interest rate environment, lower loan volumes and excess liquidity remained while momentum continued on our negative deposit pricing strategy. A net funding benefit of €15m, from the €4bn TLTRO drawn down in September 2020, was recognised in NII in the period. A further €6bn TLTRO was drawn down in June 2021.

Following a strong H1 financial performance, the company said: 'we are on track to meet expectations for the full year and re-iterate our income and cost guidance. With the improving economic outlook, we expect a net credit impairment writeback for the full year.'

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