Allied Irish Bank's Executive Chairman has said that the bank got things badly wrong and that dealing with this legacy will take time.
Speaking at the publication of the bank's results, David Hodgkinson said the bank lent too much to the property sector.
AIB announced earlier that it expects to cut 2,000 jobs during 2011 and 2012.
The job cuts will be spread across the organisation and the bank insists the vast majority of lay-offs will be voluntary.
Massive job cuts had been expected at AIB as the bank is now just over 92% owned by the State, has to restructure, sell assets and raise cash to get back to profitability.
A new 'core' bank is to be established.
The bank announced total losses of just over €10bn for last year.
Mr Hodgkinson said he understood the hurt, anger and frustration felt by investors who between them had lost €18bn over the last three years.
He said many of these were members of the general public and staff, who are understandably aggrieved.
Mr Hodgkinson acknowledged the taxpayer for the enforced investment in the bank and said the bank would no longer exist had the investments not happened.
He said the future is challenging, but that there is real reason for optimism. The bank is open for business and wants to talk to customers whether they are in business, buying homes, or in difficulty, he said.
Mr Hodgkinson said the bank would resume promotions next month and that would mean higher pay for those who were upgraded.
AIB says business and market conditions remain challenging and the environment for generating operating income remains difficult.
It says the speed at which AIB recovers and returns to a position of profitability is heavily influenced by Ireland's economic prospects.
Speaking in the Dáil, the Taoiseach said the job losses at AIB are of most serious concern to the workers involved.
Enda Kenny said there should be a full consultation with the workers affected and signalled there may be a debate on the matter in the House.
Earlier, Socialist Party TD Joe Higgins said the 2,000 jobs losses at AIB is 'shocking' and said it is not the 'spivs' who created the banking crisis that will lose their jobs.
People Before Profit TD Richard Boyd Barret described it as a devastating annoucement and said it should be the subject of an emergency debate.
Fianna Fáil's Willie O'Dea asked the Taoiseach if the State could ensure that there would be no compulsory redundancies at the bank.
Bank reports record loss
For last year, the bank reported a total loss for the group of €10.2bn - compared with a loss of €2.3bn in 2009. It reported losses on loans transferred to NAMA of €7bn.
Mr Hodgkinson said the bank's losses were mainly due to poor quality loans, mostly in the property sector.
He said outflows of deposits from the bank had stabilised after news of the Government's restructuring plans.
Speaking on RTÉ's Morning Ireland, Mr Hodgkinson said there had been a kind of 'collective madness' on property and that most of the bank's loan problems were based in the Republic of Ireland.
He said the bank's search for a new chief executive was progressing well, but it was 'cranking up' the process only now after the results of the stress tests.
The AIB chairman said the bank would aim to be 'fair' in how it implemented changes in interest rates on deposits and loans.
On the Irish economy, he said it had some 'powerful' advantages, and he was positive about its long-term potential, but a return of confidence was needed.
The bank says just over 30% of its loans are defined as 'criticised'.
This includes loans that are unlikely to be repaid, but also those which show signs of weakness. The figure rises to 34.3% for loans in the Republic of Ireland.
In Ireland, the bank set aside almost €450m linked to losses on residential mortgages.
It said 4.8% of mortgages across the bank were more than 90 days behind with repayments, a big increase from 2% a year earlier.
The percentage for owner occupiers also almost doubled to 2.87%.
General Secretary of the IBOA Larry Broderick said the AIB announcement was devastating for workers at the bank.
He said he believed that AIB was looking at even more than 2,000 job losses.
Mr Broderick said there was greater uncertainty among bank employees following the announcement because there was no detailed plan from the bank.
However, he said the voluntary redundancies were achievable, if the scheme was implemented properly.
Minister for Public Expenditure Brendan Howlin said it was a bleak day for the workers. He said the Government could not micro-manage the banks.