AIB will defend its policy on standard variable rate mortgages but will not rule out a rate cut when it appears before the Oireachtas Finance Committee tomorrow.  

RTÉ News has seen details of the opening address to be made by the bank's CEO, David Duffy.

He will link interest rates to high levels of mortgage arrears.

Mr Duffy will say default rates mean it is more risky for banks to lend in Ireland than in other countries in Europe.

He will say that the vast majority of any profits generated by the bank are ultimately to the benefit of the State because it owns the company.

Mr Duffy will also point out that the bank has already cut rates, in December, saving a customer with a mortgage of €200,000 over 25 years €330 annually.

However, in a key message in his address, Mr Duffy will say "the bank is carefully monitoring all the variable components that influence interest rates and will act accordingly in favour of customers where it makes commercial sense to do so".