PROFITS forecasts on the $1.36 billion (£840 million) Dauphin Deposit Corporation deal are based on very conservative assumptions, according to AIB Group chief executive, Mr Tom Mulcahy. "We did not want to, produce figures which depended on too many positives," he said.

But he is confident that the US bank, which has a good record of earnings growth, will be able to beat the pre deal estimates for revenue and profit growth. The forecasts were prepared before the US bank reported its 1996 results.

The acquisition of the fourth largest commercial bank in the State of Pennsylvania will give AIB a banking operation with assets of just under $17 billion in the adjoining states of Maryland, Washington DC, Pennsylvania and Virginia. It will broaden the sectoral base of AIB's existing US subsidiary, First Maryland Bancorp (FMB).

The Dauphin acquisition will significantly advance AIB's strategy to become one of the top three banks in the regional marketplace in which FMB operates. AIB will do smaller fill in acquisitions in its US regional market over time, Mr Mulcahy said. In Britain the group is expanding its services to small and medium business customers and in Northern Ireland it has about 20 per cent of the market.

In the domestic market Mr Mulcahy said AIB is developing a sales culture. "We are a big company trying to behave like a small company. We want to be close to the customer, innovative and offering attractive prices," he said.