Allied Irish Banks (AIB) has issued an unexpected trading statement yesterday. AIB has doubled its bad debt forecast for 2008 and nearly halved its earnings estimate.
The bad debt charge for 2008 will therefore total €1.8 bn or 137 bps of average loans (37bps specific bad detbs, 63bps incurred but not reported and a further IBNR charge of €500m).
Earnings per share for 2008 are now expected to be around Eur 66c, compared with the 120 cent previously forecast in November and down from 205.9 cent posted in 2007.
Further details of AIB's 2008 performance and outlook will be provided at their results announcement on 2nd March.