AIB made a pretax profit of €1 billion in the first six months of this year, which was €200 million lower than in the same period of 2015.
The bank said its profit this year was driven by a strong business performance, net provision writebacks of €211 million and one-off benefits including the sale of its share in Visa Europe.
Its net interest margin increased by 16 basis points to 2.08 per cent with continued expansion expected.
Its operating expenses rose by 5 per cent in line with expectations to €677 million.
AIB achieved €6.1billion in new lending approvals to customers with €3.9 billion of drawdowns, which represented a 2 per cent increase.
Impaired loans reduced to €11.3 billion in the period, down €1.8 billion since December 2015.
The bank said it had a robust capital base with a transitional common equity tier 1 (CET 1) ratio of 16.5 per cent and fully loaded CET1 ratio of 13.3 per cent, both ahead of minimum regulatory requirements.
AIB also announced a payment of almost €1.8 billion to the State to repay the Contingent Capital Notes (CoCos) that matured on July 28th.
This brings to €6.5 billion, payments it has made to the State, which owns 99.9 per cent of the business and gave it a €20.8 billion bailout.
Commenting on the results AIB chief executive Bernard Byrne, said: "These results reflect the underlying strength of the financial performance of AIB and our robust capital position which allows us to continue to support the economies in which we operate and to facilitate the further payment of €1.8 billion to the State.
“We are a customer-focused, digitally-enabled bank and our financial performance, strong franchise and leading market propositions, position us well for future challenges and opportunities.”
The Minister for Finance Michael Noonan welcomed the receipt of the €1.76 billion from AIB as repayment for the CoCos.
“This return of capital to the State is part of an important process to recoup taxpayer’s money used to bailout the bank, and to continue reducing our national debt to a more sustainable level,” he said.
“The redemption of this capital note removes the final legacy instrument of the financial crisis from the balance sheet of AIB, and re-affirms the bank’s substantial progress in returning to normal operations. It also underlines its commitment to fully repaying the capital invested by the State.”
Mr Noonan also commended the bank on its “continued profitability” in the half-year and its “significant lending” into the Irish economy.
