AIB posted a five per cent drop in adjusted earnings per share for the six months to end-June, and said an expected currency hit meant it was targeting low single-digit growth for the year.
The bank reported adjusted earnings per share of 58.5 cents, with pre-tax profits down to €636 million from €703 million in the same period of 2002. The results were broadly in line with market forecasts.
However, chief executive Mr Michael Buckley said the bank had used cash proceeds from the sale of its US business Allfirst to buy back six per cent of its own shares.
"This will positively impact future earnings per share," Mr Buckley said in a statement, adding the bank's capital position remained "very strong". AIB said recent euro strength had negatively impacted adjusted EPS by four per cent and reiterated guidance given in a trading statement last month that earnings growth for the year would be in the low single-digits.
The bank said excluding adjustments for the new accounting standard FRS 17, the Government levy introduced in last year's budget, and a restructuring charge relating to its sale of Allfirst to M&T Bank in the United States, its adjusted EPS would have shown growth of four per cent.
AIB said it had enjoyed strong loan growth in its Irish banking operations, with profits up 16 per cent. In Britain and Northern Ireland profits grew by 18 per cent.
At AIB's Polish operation, Bank Zachodni WBK SA, profits were down 32 per cent.
The bank said it would pay an interim dividend of 19.0 cents - an increase of 10 per cent on the same half last year.