AIB reported post-tax profits of more than €2 billion for 2023 today (Wednesday, March 6) as it also warned that the transition to “more climate friendly” methods will be a key challenge for agriculture in 2024.
The bank said that its “2023 financial performance was “the strongest in our history” and underlined that “supporting the transition to a lower-carbon economy is a strategic priority for AIB”.
Last year the bank delivered €3.7 billion of new green lending – which represented 30% of its total new lending of €12.3 billion.
The increase in new green lending comes as AIB’s chief executive, Colin Hunt, today again highlighted the bank’s ambition to “have a net zero portfolio by 2040, and by 2050 including agriculture”.
He also highlighted that the bank had “tripled” its climate action fund to €30 billion.
AIB has also established a dedicated climate capital segment that will “further our progress in financing renewable energy and infrastructure development”.
In its latest annual financial report the bank also flagged its support for “sustainable farming” and used the example of its role as the “financial institution partner in Carbery Group’s Farm Zero C project”.
“In this role, AIB supports the research, promotion and public advocacy of the project work,” it stated.
The latest results show AIB’s total operating income in 2023 was €4.741 billion – 64% higher than 2022, and that the bank’s gross loans increased by €5.8 billion to €67 billion.
According to AIB’s 2023 annual financial results, agriculture, forestry and fishing accounted for 3% of its total loan book.
The latest results show that AIB’s non-property business portfolio consists of €20.1 billion in loans.
The agriculture, forestry and fishing sub-sector represents 9% of the portfolio valued in the 2023 annual financial results at €1.8 billion.
Farm incomes
According to the results, 2023 was a “mixed year for Irish agriculture with farm incomes reducing from historic highs back towards five and 10-year average income levels”.
AIB stated in its latest financial report: “Input costs on farms continued to reduce in 2023, with the sector expectation that this trend will continue in 2024.
“Teagasc [is] forecasting that farm incomes will increase across all sectors – except pig farming – in 2024. This is due to improved commodity prices and lower input costs”.
The bank also warned that “the transition of activities to more climate friendly and sustainable methods will continue to be a key challenge in 2024”.