Reducing the volume of non-performing loans on AIB's balance sheet will remain the key focus for Colin Hunt when he takes up the post of chief executive at the bank.

Mr Hunt, a former adviser to Brian Cowen, was announced as CEO just before Christmas.

His appointment is awaiting regulatory sign off.

The bank reported full year results for 2018 this morning which included confirmation that the level of non-performing loans (NPLs) had dipped below 10% of the total loan book.

Owen Callan, Financials Analyst at Investec, said getting that figure down further would be Mr Hunt's main focus when he takes up the role of CEO.

"They want to get that figure below 5% of gross lending by the end of the year. There's still a bit of work to be done.

"Otherwise, it's about releasing all the excess capital on the balance sheet and ensuring they remain up to date with technology and ensure costs remain in line."

He said they were likely use further portfolio disposals to achieve the lower NPL volume.

"They've been successful in the past in getting rid of large volumes on one fell swoop, so to speak, and writing back some of the credit provisions against that, giving a small capital release to the bank.

"Of course, it remains a difficult political environment when it comes to owner-occupier mortgages."

The taxpayer – which is still a 71% stakeholder – will also get a small return on its investment in the bank.

"It's paying back €461 million via a dividend. €327 million of that will flow back into the state coffers. The government can use that money for day to day spending rather than debt reduction, as was the case when they sold shares in the bank a few years ago."

Overall, the bank reported a pre-tax profit of €1.25 billion for 2018 – down 5% on the previous year.

Net interest margin – the difference between what it pays on deposits and what it takes in on lending – came in at 2.47%, down marginally from 2.5% in 2017.

Owen Callan described the overall performance as decent.

"It has more of a focus on the Irish market. Some of the problems with Bank of Ireland related to its UK division. AIB doesn't have those issues to the same extent. The SME sector remains a bit of challenge given Brexit risks."