Mr Hunt did not reveal if or when AIB depositors would be able to benefit from the rate hikes, saying only that it was “a point of active consideration at the moment”.
“Most of the interest rate adjustments due to the rise in inflationary pressures are, I think, behind us, but I suspect we will see some more rate hikes between now and the end of the year,” he told reporters afterwards . the bank’s annual general meeting in Dublin on Thursday.
He said rates are likely to remain higher “for some time”.
His comments stem from optimistic first-quarter results, which showed a 70% increase in total income compared to the first three months of last year.
Net interest income was 93% higher than in the first quarter of last year and 16% higher than in December, giving the bank a net interest margin of 2.78%, 0.60 points higher than at the end of 2022.
The group expects net interest income to exceed €3.3 billion this year, thanks to the ECB’s increases.
But Mr Hunt and the AIB board faced some backlash from small shareholders over their deposit rate policies at the AGM.
AIB’s deposit rates range from 0.1 pc. for student savers up to 1 pc. for regular savers, with term deposits of 0.5 pc. for business and private customers.
Mr Hunt said the bank was first out of the trap of setting higher deposit rates when the European Central Bank first started hiking last July.
“We are vigilant about prices, across the product range, and in the event that we deem it necessary to change our prices again, we will do so,” he said. “It’s an area we’re constantly watching.”
Ulster Bank’s departure from the Irish market – as well as KBC’s switchers, which has also left the country – has had a “significant” impact on AIB’s operating results, Hunt said.
He said an estimated 48 percent of customers leaving the two outgoing banks bank with AIB.
“We’ve benefited significantly, in terms of the size of the loan portfolio, also in terms of our overall customer franchise, and the bank now has more customers here in Ireland than at any time in its history.”
The number of customers increased by 450,000 last year, with the bank now serving 3.2 million customer accounts.
It expects to grow customer loans by more than 8 percent in 2023, following a 5 percent increase in new loans in the first quarter.
New mortgages in Ireland rose 7 percent to €0.9 billion in the quarter, giving AIB a market share of 31 percent.
Personal loans rose 24%, but credit demand from SMEs in Ireland “remains subdued,” the bank said in a trade update ahead of the AGM.
Despite the turmoil in global banking markets following the implosion of a third US regional lender, Mr Hunt said he saw “no signs of stress” in the Irish sector given low debt and high savings rates, pointing to an optimistic domestic economic image .
“The overall debt level of the Irish economy is, in real terms, about half of what it was during the global financial crisis. And that relatively low level of debt is, I think, one of the reasons we’re not seeing levels of distress in the [loan] booking at this stage, but we remain alert.”
He said the bank is “open for business” if customers want to transfer their loans from one of the vulture funds, but said the lender has not been approached by the Central Bank to change its lending policy.
“I would encourage borrowers wishing to transfer mortgages to AIB to come and talk to us and we will review such applications on the same basis as all customers coming in for our mortgage facilities.”
