AIB has reported a 5% dip in pre-tax profits for 2018 but said it remained on track to meet its medium term targets.

The lender, which is 71% owned by the state, said its pre-tax profits for the year to the end of December came in at €1.25 billion, down from €1.31 billion in 2017.

New lending at the bank during the year increased by 15% to €12.1 billion with growth across all segments. 

Mortgage lending increased 16% in the year.

AIB today announced a 42% increase in its proposed dividend, with the bank set to pay out a dividend of €461m or 17 cent per share for 2018.

AIB also reported "significant progress" in reducing the level of its non-performing exposures (NPEs). 

The bank said its NPEs dropped by 41% from €10.2 billion to to €6.1 billion and it said it was on track to achieve a level of about 5% by the end of 2019.

On Brexit, the bank said the uncertainty it has caused appears to have resulted in postponed investment decisions, especially among SMEs in both Ireland and the UK.

The bank said its team of 26 Brexit advisors continue to work closely with its Irish and UK-based customers to better understand and advise on the potential implications of Brexit on their businesses.

Outgoing chief executive Bernard Byrne said the bank had seen another year of strong operational and financial performance.

"Across all the key metrics, by which we judge ourselves, the business has performed well during the year," Mr Byrne said.

"The quality of the balance sheet continues to improve as we work through out legacy non-performing exposures. Our 2018 NIM, NII and costs are on track with our medium term targets and our underlying capital generation has helped us in reaching our objective of normalising of proposed level of dividend payment," he added.

Colin Hunt, AIB's proposed new CEO

AIB also said today that the regulatory process relating to the appointment of Colin Hunt to the chief executive role at the bank is progressing well and is expected to finalise shortly.

It said that Donal Galvin, its deputy chief financial officer and group treasurers, has been appointed AIB's chief financial officer with immediate effect.