Allied Irish Banks pre-tax profit rose ahead of market forecasts at 10 per cent in the first half of the year.
The company said it expects strong lending and deposit growth to continue for the rest of 2004.
The bank's Irish operations improved by 1 per cent, while British and Northern Irish business was up 20 per cent.
AIB reported pre-tax profit of €699 million in the six months to the end of June, with adjusted earnings per share (EPS) of 64.4 cents, up from 60 cents previously.
The bank, which confirmed last week it is to repay nearly €35 million to thousands of customers it overcharged, said it expected full-year adjusted EPS to be between 123 and 126 cents.
The results were ahead of average forecasts from a Reuters survey for pre-tax profit around €667 million and adjusted EPS of 62.9 cents.
"They seem to be ahead at the EPS level, the net interest margin appears to be in line, and the dividend as expected, but overall the results look very solid," said analyst Mr David Odlum at NCB Stockbrokers in Dublin.
AIB declared a 10 per cent rise in its interim dividend to 20.9 cents. Its Tier One capital - a gauge of financial health - eased to 7 per cent from 7.7 per cent previously.