AIB said today it expected to report low single digit growth in earnings this year as a result of the strong euro diluting overseas earnings, but said growth in its Irish business remains strong.
In a trading update published today AIB said the weakening of the US dollar, sterling and Polish zloty against the euro will cut 4 per cent from AIB's non euro zone earnings, resulting in low single digit growth for the group as a whole.
But it added that customer demand in Ireland remains very strong, helping the group to eat into its competitors' market share.
The capital markets division continues to display resilience in difficult market conditions but performance in Poland is weaker, due to the impact of sharp interest rate cuts, the statement said.
AIB now estimates its Irish loan book will grow by around 15 per cent this year, with home mortgages continuing to be the fastest growing product category.
Referring to the merger of the troubled Allfirst subsidiary with US bank M&T, AIB said initial signs were positive for a successful integration of the two businesses.
In its outlook for the Irish economy, AIB said good economic management is essential to ensure Ireland remains well-positioned to benefit from a potential upswing in the global economy, which it expects to gather momentum over the coming months.
The bank said it anticipates Irish GDP growth of around 2 per cent in 2003.