Bank of Ireland governor Mr Laurence Crowley today told the company's shareholders that "trading for the first three months has been satisfactory."
Speaking at the bank's annual general court, Mr Laurence Crowley said: "The Irish economy is not achieving the spectacular growth rates that characterised the 1990's."
"But the current and prospective economic growth rates for the two principal economies in which we operate, Ireland and the UK, are expected to outstrip the EU average," he said.
Mr Crowley said: "We face a number of challenges. European and US interest rates have fallen further since the year end, reducing our net interest spread."
He said: "Whilst stock markets have improved somewhat in the second quarter of the calendar year, sales of life and pensions products remain difficult in the current environment."
However "the strengthening of the euro against sterling will have a negative effect on the translation of our overseas earnings," he added.
The Governor said: "Virtually all pension funds have been adversely affected by the falls in equity values in recent years, and ours is no exception."
He said: "We are confident that we can face these challenges and, based on stock markets and exchange rates remaining at current levels, we foresee a continued good performance in the current year."