AIB has announced a 72% increase in pre-tax profits for the year to December to €1.9bn, broadly in line with market expectations.

The strong outturn reflects a solid increase in new lending to unimpaired customers, higher fees and very tight control of costs which fell by 8% to a cost income ratio of just under 50%.

The single largest contributor to profitability though was the bank’s continued write back of provisions originally made against bad or impaired debts, which is now no longer required.

These reserve write backs amounted to €925m while the overall value of impaired loans fell by €9bn last year to €13bn.

AIB, Chief Executive, Bernard Byrne says the group’s financial performance has confirmed its transition from a work-in-progress to a fully functioning sustainable well-capitalised bank and that it is now well positioned to enable the State, which still owns 99.8% of the bank to recover its full investment of €20.8bn.

Speaking to Newstalk this morning, he discussed whether Ireland's ongoing political impasse and recent sharp falls in global bank valuations will delay the bank's flotation:

"IPO's aren't something that anyone can control because markets do move in and out. That is the situation we are in at the moment, there is flexibility and volatility in the marketplace.

"Our job is to push through that and to make sure that the business is ready. I think that is what this set of results show."

Mr Byrne refused to be drawn over whether the bank will reduce its standard variable mortgage rates in the near future.