AIB is in exclusive talks with NatWest over the acquisition of around €6 billion (£5bn) of Ulster Bank performing tracker mortgages in the Republic.
The Irish bank confirmed on Friday morning that it was in talks with Ulster Bank’s parent owner NatWest to acquire the tracker mortgage portfolio.
In a statement, AIB said that any potential transaction remains subject to negotiation and agreement.
The confirmation comes after the Irish Competition and Consumer Protection Commission cleared the proposed purchase by AIB of Ulster Bank's €3.7bn performing commercial loan book across the border.
NatWest announced its plans to wind down the Ulster Bank operation in the Republic last year.
The move does not affect the Ulster Bank business in Northern Ireland, but there is continued uncertainty over the future of some 600 Ulster Bank contact centre employees in Belfast, who directly service the operation in the Republic.
NatWest announced on Friday that its profits doubled in the last three months as it benefited from rising interest rates and improved economic conditions.
Bosses revealed operating profits before tax of £1.2bn for the first three months of 2022, compared to £573 million in the final three months of last year - beating analysts' expectations of £755m.
During the same period a year ago operating pre-tax profits were £894m.
But chief executive Alison Rose said the rest of the year was set to be hard as customers and businesses got to grips with the cost-of-living crisis.
She added that despite the rising cost of living the bank has not seen a surge in customers needing support or extra credit.
Ms Rose said: "We are not seeing any signs of distress or an increase in customer calls to the financial support team, no rise in forbearance, and credit card and overdraft limits remain below 2019 levels.
"That said, many families have never had to operate in an inflationary environment before so there is a degree of anxiety."
