AIB has reported a return to profit in its half year results.
The group recorded profit after tax of €274m in the first half of the year and included a net credit impairment writeback of €103m.
Operating profit at the bank was €375m.
There is significant corporate development activity in train at the Group, which are subject to regulatory approvals, including the purchase of around €4.2bn Ulster Bank corporate and commercial loans; the acquisition of stockbrokers, Goodbody and a joint venture with Great-West Life Co.
AIB reported performing loans were broadly stable at €54.9bn and new lending increased 3% to €4.5bn.
Non performing exposures were 12.5% lower at €3.8bn or 6.5% of gross loans.
The group said it is well positioned for growth as customer deposits increased 8% to €88.3bn; an additional €6bn
It says it is on track to deliver full year market expectations for income and costs, with a net credit impairment writeback expected.
AIB said the mortgage market in Ireland performed strongly in H1 2021 with total drawdowns of €4.4bn up 26% on H1 2020. A solid rise in mortgage lending is expected with market estimates revised to around €10bn for 2021.
New mortgage lending was €1.1bn in the first six months. The bank said, with a strengthened proposition, momentum continues in its applications and approvals data, boosting confidence in its full year performance.
The impact of pandemic restrictions continued to weigh on consumer credit demand and contributed to a 6% decline in new personal lending, while credit card debt and overdrafts declined.
Customer deposits of €88.3bn increased 8% as pandemic related savings continued to accumulate. The increase, together with an additional €6bn TLTRO drawn down in June 2021, contributed to higher cash held at the Central Bank amounting to €32bn.
The bank said it continues with its negative deposit rates strategy and currently has around. €10bn at negative rates.
In May 2021, AIB issued its second green bond, raising €750m, the proceeds of which will contribute to the financing of projects with clear environmental and climate change benefits.
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Chief Executive, Colin Hunt said the fundamentals of the business remain strong, underpinned by a solid balance sheet and robust capital base.
"These results, coupled with our strong customer franchise and digital leadership, position us well for the future, as we continue to tightly manage costs and execute our strategy at pace.
"While remaining alert to the economic uncertainties, I look forward to the remainder of 2021 and beyond with confidence, focused on our newly revised medium-term targets, united by our purpose and continuing to support our customers and the communities that we serve."
On the purchase of around €4.2bn Ulster Bank corporate and commercial loans, Mr Hunt said the bank expects to welcome those customers throughout 2022.
"We have just entered into the competition commission approval process and are going through a regulatory approval process," Mr Hunt said speaking on Morning Ireland.
Mr Hunt refused to comments on speculation that AIB is in talks with Ulster Bank parent company Nat West in relation to the purchase of Ulster Bank's tracker loan book in the Republic.
He said the bank does not comment on market speculation or rumour.
"What I can say is that we are in a very strong capital position, and we remain alert to opportunities that may well arise as the banking landscape evolves," he said.
On the acquisition of Goodbody stockbrokers, Mr Hunt said they are still awaiting final clearance from the Central Bank.
"That is progressing well and I am fairly confident now that we will formally welcome Goobody into the AIB group within this calendar year, probably as we move into the fourth quarter," he said.
Following confirmation yesterday evening that the Minister for Finance has started the process of selling the State's shareholding in Bank of Ireland, Mr Hunt said it is "entirely a matter for the Minister for Finance and for the Government" on whether they will start selling more of the State's stake in AIB.
"My jobs is to ensure that the bank is well run, that we have got a competitive range of products and services that we can bring to our customers, that we have a very clear strategy so that if and when the Government makes the decision to reduce its shareholding within the AIB group that we have a strong investment proposition to bring to the market," he said.
Speaking on Morning Ireland, Mr Hunt shared details of a new AIB payments system due to launch later this year.
"We'll be allowing AIB customers to make an instant payment to any other AIB customer in their phone.
"The functionality will mean that there will be no need for our customers to enter bank account details, all they will need is their contact lists," he explained.