AIB Chief Executive David Duffy has said that if the bank's costs of funding fall in the next month or two it could cut mortgage interest rates.
Speaking to representatives of the Oireachtas Finance Committee today, Mr Duffy said that if the bank sees variables change and continue to change, those cost cuts will be passed on to its customers.
However Mr Duffy said the bank would need to wait for its financial results, which will not be known for the next month or two, before they will know whether they can pass on any reductions.
He said the bank has to see all factors regarding funding, which includes costs and risks.
Pressure has been mounting on banks to cut standard variable mortgage rates in recent weeks.
Mr Duffy also said that there have been mis-representations regarding repossessions in the media this morning.
He made the comment after the term "tsunami of repossessions" was put to him.
Mr Duffy said anyone in the court repossession process would require them to have not engaged or communicated with the bank in several years.
AIB representatives said there were 800 customers currently in the court process on "a test payment period".
They said that when the test period is over, the expectation would be that they would come out of the legal process.
The bank said it could not disclose the level of voluntary surrender or write downs, but could confirm that it is seeking adjournment in 50% of cases because of re-engagement.
Earlier Mr Duffy said that, from the bank's perspective, he did not have "a fundamental problem" in a reduction in the term of bankruptcy in this country.
A bankruptcy currently takes three years in Ireland, however a bill by Labour Party TD Willie Penrose has suggested reducing it to one year.
