AIB has said it is on track of reaching its target of returning to pre-provision operating profit in 2013.

In an interim management statement, the bank said that actions taken last year have resulted in an improvement in its overall operating performance in the first quarter of 2013.

It said its loan portfolios are performing in line with expectations and bad debt provisions for 2013 are expected to be ''significantly lower'' from 2012 levels, based on current expected economic performance.

AIB said that continued progress has been made in relation to offering sustainable permanent solutions for mortgage and SME customers who find themselves in financial difficulty.

''We are committed to meeting or exceeding the targets set by the Central Bank of Ireland in relation to mortgage arrears,'' the bank added.

AIB said that after growth of €2.9 billion last year, customer accounts continued to increase in the first quarter of this year. It added that there has been no material impact on balances as a result of the expiry of the Eligible Liabilities Guarantee Scheme in March.

The bank said that €19.6 billion of non-core deleveraging was completed by the first quarter of this year, representing about 95% of its deleveraging target of €20.5 billion.

''Cost reduction remains a priority at the group and the benefits of the initiatives undertaken in 2012 are begining to be seen,'' today's IMS statement said.