IRELAND – Allied Irish Banks, Ireland’s largest company, says it has a net pension liability of 482 million euros as at December 2002 and that the decline would hit its bottom line.

“The group has recognised a net pension liability on funded schemes within shareholders’ funds of 482 euros million at December 2002,” AIB said in its 2002 earnings report.

“This compares to a net pension asset within shareholders’ funds of 314 million euros at December 2001,” it added.

“The decline in value of the retirement benefit scheme assets will also impact the profit and loss account - other finance income, during 2003.” It said that during 2002, the value of its pension assets fell by 733 million euros, taking into account exchange rate movements.

AIB said: “As it is not considered appropriate to significantly adjust the assumptions on asset returns to compensate for the decline in the market value of the assets in 2002, the reduction in asset values will have a negative impact of approximately 47 million euros on other finance income in 2003.”

AIB also said that its asset management fees declined 11% to 158 million euros. “Asset management and investment banking revenues were lower due to a decline in asset values, reduced business volumes and the general impact of difficult equity markets.”

But the bank’s overall attributable profit rose 4% to 1.04 billion euros. Chief executive Michael Buckley said: “2002 was a year of slowing economies and difficult financial markets.” He added: “We look forward to another strong underlying profit performance in 2003.”