The new chief executive of AIB has signalled that the bank may sell further non-performing loans later this year.
Addressing the Oireachtas Joint Committee on Finance, Colin Hunt said the bank is still carrying a "large chunk of deep long-term arrears that simply must be reduced by year-end."
Mr Hunt, who only recently assumed the helm at the bank, said addressing non-performing loans (NPLs) is essential to the resilience of the banking system and borrowers.
He said until now, the NPL resolution process has been a gradual and frequently lengthy one and the pace of reduction has begun to moderate as the bank deals with the more intractable cases.
"It is imperative that we bring clarity to the debate and confront the reality of the impact of NPLs on individuals, on the economy, and on banks' viability," he said.
"NPLs inhibit banks' primary function of lending to the economy and ultimately they lead to higher bank costs, resulting in higher rates for businesses and home-buyers."
"It is also true to say that those individual customers who do meet their loan repayments are, in effect, negatively impacted by those who don't repay."
Two weeks ago AIB announced it was selling a portfolio of €1 billion of bad loans, where 95% of the arrears were over two years non-performing and 80% were over five years non-performing.
Mr Hunt said this sale further reduced the bank's bad loan ratio to around 8%, but with a European average of approximately 3.5% AIB's aim is to reach 5% by the end of this year.
The bank boss said he would find it unconscionable as CEO to allow the bank to confront future shocks while still fettered to legacy issues.
"I appreciate that some members of this committee are strongly opposed to the sale of NPL portfolios," he said.
"But let me be clear – we are not in the business of allowing its customers be cast aside as an inconvenience," he stressed.
"The Oireachtas itself has ensured that the protections of the Central Bank's Codes of Conduct are transferred with the loans to the new owners and we fully support that. Our strong preference is to retain these customer relationships where they are in our mutual interest and where the customers are engaging with us."
The new CEO also told the committee that he supports the level of surveillance put in place by the Central Bank and European Central Bank since the financial crash, and does not regard it as an imposition.
He said the bank has returned €10.8 billion of what was injected into AIB by the state and he and his team would spare no energy in ensuring AIB remains positioned to allow the Government to recoup its investment when markets are more buoyant.
Mr Hunt said the bank must focus investment not only on digital banking and apps, but also on ongoing system-resilience improvements.
"The threat of cyber-crime remains high in modern-day banking and continuous risk-management involves the purchase of costly tools and services," he said.
"New regulatory requirements around GDPR readiness also require a significant spend as does the ongoing need for acquiring enhanced data and analytical capabilities," he added.
On the tracker mortgage controversy, Mr Hunt said the bank is in the process of concluding its examination of the issues.
"The Examination programme is materially complete now with final technical activities underway during 2019," he said
"This does not in any way obviate the fact that we will continue to deal on an individual basis with impacted accounts that require further attention through the Appeals or Complaints processes."
"I am very aware of the financial losses and human distress caused by the tracker issue and I can assure you that this chapter in the bank's history will not be finally closed until all adversely affected customers are properly compensated with fair settlements," Mr Hunt stated.