AIB shares moved higher in Dublin trade today after it posted profits after tax of €2.1 billion for the year to the end of December, down on the €2.35 billion profit reported in 2024.
The bank returned to full private ownership in June 2025.
The bank said its total income decreased 8% primarily driven by lower interest rates, while its net interest income also fell by 9% to €3.748 billion - the fall had been expected.
"We were dealing with a looser monetary policy environment in 2025 than we were in '24," AIB CEO Colin Hunt said. "So interest rates on average would have been lower last year than they were in the previous year."
He said the underlying performance of the business was strong during the year.
AIB reported a 7% increase in customer deposits for the year, reaching €117.2 billion. Customer deposits are expected to grow by 2-3% in 2026, it added.
The bank's total new lending increased by 2% to €14.7 billion.
It said its personal lending in Ireland was up 4% to €1.4 billion as consumer credit demand continued to increase. It also noted that 43% of its new lending was green.
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"That's a reflection of the health of the Irish economy and indeed the state of the savings ratio in Ireland, which is very, very high," Mr Hunt said.
Its new mortgage lending in Ireland dipped to €4.3 billion from €4.5 billion in 2024 and the bank said it has a mortgage market share of 30%. It said it supported about 9,000 customers to buy their first home last year.
AIB said that new lending to Irish SMEs remained "relatively stable" at €1.6 billion with two thirds of small business loans originated on AIB's digital business loan platform while it said that automation has reduced "time to cash" by 44%.
Costs for the year increased 1% to €1.992 billion, which was lower than expected.
A final ordinary cash dividend of 46.257 cent per share - equating to €988m - has been proposed by the bank and is subject to shareholder approval at its AGM on April 30. This is in addition to the €263m dividend paid last November.
Asked on RTÉ's Morning Ireland whether it was fair to keep deposit rates low while profits and shareholder returns remained above €2 billion each, Mr Hunt said the bank did offer "attractive" interest rates to customers who wanted to put money away.
"Every customer has the choice to make in terms of where they put them; there's a very strong liquidity preference in Ireland," he said.
"Customers seem to prefer having quick and easy access to their funds and that quick and easy access in a secure way," the CEO said.
"We do give people very attractive interest rates for term and that's been a feature ever since interest rates started going up within the euro zone," Mr Hunt said.
"We were extraordinarily restrained in terms of what we did as interest rates increased," he explained.
"We passed on less than half of the rate increase to our mortgage customers. So we're extraordinarily conscious of the need to be supportive of the Irish economy at a time when there was a cost of living challenge," he added.
AIB's annual report shows that Mr Hunt's pay and remuneration rose by 23% last year, to €793,000. That came after the Government removed the cap on bankers' pay, in light of AIB's return to full private ownership.
Mr Hunt said that figure was set by the bank's board and remuneration committee and was subject to shareholder approval.
"I play no role in the setting of my remuneration," he said. "I focus all my energy... on running the bank to the best of my ability, working with 10,000 colleagues, delivering high-quality services to 3.4 million customers every single day, the length and breadth of the country."
On Monday members of the Financial Services Union in AIB voted to accept a 3.5% pay increase this year.
Looking ahead, AIB said that despite geopolitical uncertainty, it remains focused on delivering its strategy while preparing for the structural forces shaping its operating environment, including demographic change, electrification and digitalisation.
It plans this year to launch its next-generation mobile app and introduce industry-wide peer-to-peer payments through Zippay.
"Following a strong start to the year and with continued momentum in our business, we remain focused on completing the final year of our current strategic cycle and planning for the future with confidence," the lender added.
AIB shares rose in Dublin trade today.
