AIB will cut costs by 10% more than announced earlier this year to meet capital and profitability targets by 2023, saying the Covid-19 crisis made significant change both necessary and possible.

AIB set out new medium-term targets on March 6, a week before Ireland began to impose Covid-19 restrictions, leading to one of Europe's longest lockdowns that forced Ireland's largest mortgage lender to set aside €1.3bn in impairments.

In March, AIB said it planned to cut its cost base to €1.5 billion euros in 2022, target a fully loaded core equity tier 1 (CET1) capital ratio above 14% and a return on tangible equity (ROTE) in excess of 8%.

It maintained the CET1 and ROTE targets on Wednesday but pushed the timeframe out by a year following the COVID-hit 2020.

However the bank said it planned to cut its costs before bank levies and regulatory fees to €1.35bn in 2023.

The bank will provide more details in a presentation at 9am today.

Earlier this year, the bank outlined plans to reduce its workforce by 1,500 by 2022, but then paused the plan due to the Covid-19 pandemic.

"The fundamentals upon which these plans were based, namely the great strength of our customer franchise, our modern digital IT architecture and strong liquidity and capital, remain unchanged," AIB Chief Executive Colin Hunt said in a statement.

"COVID-19 has dramatically changed the operating environment, presenting both challenges and opportunities and accelerating the trends of digitalisation, changing ways of working and sustainability. In short, it has made significant change both necessary and possible," he said.