AIB wants for the bank guarantee to be extended for a further 12 months beyond the end of September, when it is due to expire.
The bank has also said it expects to put up standard variable mortgage rates by half a percentage point in the next few weeks.
AIB this morning reported losses of over €2 billion for the first half of this year - double the losses it experienced in the same period last year.
The bank's managing director Colm Doherty said it would 'reluctantly' follow Bank of Ireland by increasing standard variable mortgages in the next few weeks. He said AIB hoped to announce potential buyers for its Polish and UK businesses by the end of next month. The bank needs to raise €7.4 billion to meet new capital reserve rules.
After that, it will engage in a cost-cutting plan which will involve job losses.
While the National Asset Management Agency is taking a large proportion of the bank's property development loans, one-third of what is left over is also concerning the bank.
Mr Doherty's comment that he would like to see the bank guarantee extended by a further 12 months highlights the difficulty the facing the bank if state support is removed.
AIB's results show that it set aside more than €3 billion to cope with losses from troubled loans. The bank made a trading profit of €976m on its normal business activities, down 42% from the same period last year.
But this was more than wiped out by the €963m losses on loans the bank transferred to the National Asset Management Agency, and another €2.3 billion AIB set aside to cope with other potential losses from loans. €1.2 billion of that €2.3 billion is from loans identified for possible future transfer to NAMA.
The bank said the six months had been a difficult period for the bank, and conditions for the coming months remained tough.
AIB chief defends business lending record
AIB managing director Colm Doherty told RTE radio that raising capital took time, and the bank was restricted in what it could say on possible sell-offs at the moment, but it hoped to be able to disclose some news in September. He said he was not aware of any talks with foreign banks about a possible investment in AIB.
Mr Doherty said AIB would be a smaller bank after it sold off assets, and it would have to address its cost structure, but would not be drawn on what form the re-organisation would take.
He said he expected the EU to sign off on AIB's restructuring plan before the final three months of the year.
On lending to businesses, Mr Doherty said AIB had sanctioned 23,000 loans to small business in the first six months of the year. But he said demand from small businesses for lending had decreased.
A breakdown of the results showed that AIB's banking business in the Republic of Ireland made a loss of almost €2.7 billion, as most of the loan losses were in this division. Capital markets profits fell 36% to €134m, while AIB's UK bank business lost €55m. Profits from its Polish bank jumped by 80%, while profits from its M&T stake in the US were up 25%.
AIB shares closed over 5.5% lower in Dublin this evening to end at 93 cent.
