The group, the largest listed firm in the Republic of Ireland, announced that profits for last year soared to â¬1.7 billion, from â¬1.3 billion in 2004, with strong growth in all markets.
The Dublin-based bank posted group operating income of just under â¬3.65 billion. Profits from its Irish operations rose by 24 per cent to â¬779 million.
AIB's capital markets division, which includes corporate and investment banking, saw profits increase by 27 per cent to â¬403 million.
The company reported that its 2005 cost to income ratio dipped by 2.5 percentage points to 55.2 per cent.
AIB chief executive Eugene Sheehy said in a statement: "Our 2005 performance reflects quality growth in all our main franchises. Strong demand continues to drive momentum and underpins our confidence in the outlook for 2006 and beyond."