Allied Irish Banks posted better-than-expected profits before tax of €1.3 billion on the first six months of the year, an increase of over 8 per cent on the same period last year.
However, the bank has experienced a 25 per cent fall in new mortgage applications in the Republic.
The company said underlying earnings per share (EPS) rose to 108.8 cents in the six months to the end of June from 94.2 cents last year. It's income for the first six months was €2.4 billion - an increase of €350m.
Speaking on RTÉ's Morning Ireland radio programme today, Mr Eugene Sheehy, Allied Irish Banks' chief executive said the bank was 'very satisfied with earnings'.
He added that about 52 per cent of the company's profits were made outside of Ireland.
However, when asked about mortgage applications in the Republic, Mr Sheehy said there was evidence of slowing demand with applications falling by about 25 per cent.
Mr Sheehy said this was "very significant" but insisted mortgage applications had been running "at very high levels for many years."
He said AIB had always taken the view that the Irish housing market had a "level of sustainability" that runs "between fifty and sixty thousand new units a year."
He said the bank saw a trend where building would reach that point "over the next couple of years."
Shares in Ireland's banks have been hit hard in recent months by uncertainty over where a slowing property market is headed and what it will mean for lenders.
AIB's Irish overall loan book increased by 10 per cent in the first half and was up 26 per cent year-on-year while for the group as a while lending increased by 12 per cent in the first six months of the year.
Shares in the bank, which have fallen over 20 per cent since hitting a lifetime high in February, were 2.2 per cent lower at €18.83 by 0820 GMT but trading broadly in line with other Irish lenders as credit worries hit global banking stocks.
AIB said today its own credit quality was strong. Although provisions for bad loans doubled to €25 million from €12 million a year earlier, impaired loans as a proportion of total customer lending fell to 0.7 per cent from 0.9 per cent at the end of 2006.
Finance Director John O'Donnell said AIB saw its overall loan book growing by 20 per cent this year.