Analysis: AIB may have hit the headlines for all the wrong reasons last year but the controversy about foreign exchange overcharging made but a small dent in the bank's performance in 2004.

Although AIB incurred costs of €50 million in connection with the overcharging, it is small beer in the context of the record pre- tax profit of €1.4 billion it delivered last year.

Yesterday's results also show no sign of a consumer backlash, as customers kept faith with AIB despite the revelations.

Not only did the bank succeed in growing loans and deposits by 30 per cent and 16 per cent respectively in its home market, it reported record customer activity and gains in its market share.

Whether the concerns thrown up in the wake of the overcharging saga about the bank's corporate culture will affect the decision on who succeeds current chief executive Michael Buckley when he steps down next year remains to be seen.

Mr Buckley, who recently turned 60, declined to be drawn yesterday on whether he felt his successor would come from within the bank's ranks or from outside them.

But he expects AIB to be in a position to name the heir apparent by mid-year.

Meanwhile, the bank is recruiting a director of operations, reporting directly to the chief executive, to oversee the day-to-day running of the bank's operations.

The new appointee will be charged with the task of improving the bank's operational efficiency by bringing technology and other processes, which are currently managed on a divisional basis, into line across the group.

Otherwise, it's steady as she goes at AIB, with few major changes planned for its five core divisions beyond building on their existing strengths.

However, the bank is considering a number of options for its life assurance arm, Ark Life, in a bid to get better access to broker-driven distribution.

Among the options open to the bank are an acquisition, a joint venture or a distribution agreement, but all Mr Buckley was prepared to say yesterday was that it was "actively pursuing some options".

Of its US associate, M&T, Mr Buckley said AIB was "very happy with our relationship". He noted the US bank's focus was on "purely organic growth" rather than making acquisitions, a position with which AIB is happy as it involves no need for further investment.

In Poland, the bank is hoping to at last reap the benefits from its position in an economy currently growing at around five per cent per annum.

It is now the fourth largest fund manager in Poland, while its stockbroking business has moved into third position from fifth position, accounting for 12 per cent of equity turnover on the Warsaw Stock Exchange last year.