AIB, Ireland's largest bank, has reiterated its commitment to increase its dividend by 10% when it makes its payment to shareholders this Friday.


The bank told the Sunday Tribune last Friday that there would be no change to its dividend policy, despite Bank of Ireland's decision two days earlier to slash its dividend in half after reassuring investors only months before that it would keep dividend payments steady.


A spokesman would not guide, however, on future payments and would only say the current policy remained as previously stated.


AIB suprised the market in August when it announced a 10% increase in its dividend payout, citing its strong capital base, after most analysts expected a freeze. Most banks are trying to retain capital to cushion the blow from an anticipated rise in bad debts. Bank of Ireland had to pare back its payout in order to hold onto an extra €300m after its outlook on delinquencies deteriorated.


In a report issued two weeks ago, analysts at Dresdner Kleinwort said both banks would be forced to raise hundreds of millions of euro in capital in the next years.