AIB today forecast that its full-year earnings per share would rise 13 per cent on the back of lending increases.
AIB said its earnings target "underlines the resilience" of its franchises and underpins the bank's confidence in the future.
Although Irish bank shares have been hit hard by the US subprime crisis, a slowing residential property market and rising interest rates, AIB said it expects profit growth next year at all of its businesses.
AIB shares gained 4 per cent to €15.70 earlier this morning, and rival Bank of Ireland gained 3.6 per cent to €10.83.
AIB shares have fallen by around 30 per cent this year, while the ISEF, an index of financial stocks, is heading for its first annual decline since 2002, having fallen 33 per cent in 2007.
AIB is also forecasting an increase in lending of about 20 per cent in Ireland and the United Kingdom. In Poland, loans will rise by more than 30 per cent, the company said.
Credit quality remains good, AIB added.