AIB said today earnings will be at the upper end of expectations due to improved performance in its overseas businesses and buoyant growth at home.
In its last trading statement before its full results next February, AIB said its expects to report double-digit profit growth for 2005 driven by high volumes in its key markets of Ireland, Poland, Britain and the US.
AIB has previously guided that full year earnings per share would be in a range of 140c - 142c. "Performance in our franchises since then now leads us to target the upper end of that range," the statement said.
"Buoyant, high quality volume growth has again been a feature of our Irish retail and commercial banking business this year," AIB said.
"Loans are expected to grow by around 25 per cent and reflect further gains from our long held position as the number one business bank in the market. Our mortgage growth is broadly in line with the market which is being achieved while ensuring new business written is of the same high quality as the back book."
The bank said its partnership with M&T bank in the US "continues to flourish and we expect this to be again reflected in its profit contribution this year."
"Earnings momentum is driven by our franchises being located in outperforming economies which underpin high volume, high quality growth. Momentum is further assured by very robust asset quality," it added.
In Britain, AIB said its focus on mid market business sectors is driving strong profit growth.
The bank said its Polish division is building on the strong recovery seen in 2004. The main drivers continue to be non interest income growth underpinned by market share gains in investment funds and stockbroking, sustained tight cost management and good asset quality.
The bank added that its investment banking and corporate banking businesses are having a good year with Goodbody Stockbrokers and corporate finance performing particularly strongly.
The bank reiterated warnings that net interest margin would erode by around 0.2 per cent due to higher loan growth and more intense competition.
Costs are expected to rise by around 7 to 8 per cent in 2005 with regulatory costs continuing to be a significant factor, AIB said.
"Asset quality remains resilient and there has been no deterioration in any of our portfolios. All leading indicators of loan impairment continue to be stable," the bank concluded.