Profits hit at Allied Irish Banks

Allied Irish Banks (AIB) has warned that market conditions will remain "extremely difficult" this year after reporting a 62% fall in annual profit.

AIB, which has received a government bail-out, said pre-tax profit for 2008 totalled 1.029bn euros (�907m; $1.3bn), down from 2.508bn euros in 2007.

Irish banks have struggled in the global financial crisis.

The bank said the poor results were due to the global crisis and it regretted some of the lending decisions made.

"The volatility and uncertainty in world financial markets and the repaid deterioration in global economic conditions made a 2008 a very challenging year for the banking industry in general," the bank said.

However, the bank said its problems were not purely down to factors outside its control.

"Decisions made under our sole control, particularly in relations to our exposure to the property and construction sectors, negatively impacted our business," it added.

AIB's share price declined 90% in 2008.

The Irish government nationalised AIB's rival Anglo Irish Bank in January this year after concerns it could collapse.

However, the government opted to keep AIB as a quoted company, but the bank is set to receive a 3.5bn-euro capital injection from the state.