Large deposits are not leaving the Irish banking system despite the Cypriot savings raid, according to AIB chief executive David Duffy.
"The Cypriot effect on deposits over €100,000 is negligible and our deposit profile across all elements is stable. Also, the level of calls from customers regarding this is de minimis," Mr Duffy told the Sunday Independent.
His views were echoed by Permanent TSB boss Jeremy Masding, who told investors last week that the bank "had not seen any unusual withdrawal patterns" in the last week and there were "no concerns" about suggestions from the EU that customer deposits could be used in a future bank rescue.
However, there is some evidence that the Cypriot raid on savings has prompted foreign investors to back off putting money into Ireland, according to Harry Slowey, director at Finance One and a former director of Bank of Scotland.
"Over the past 12 months there has been a steady return of funds into Ireland, as well as a steady return to the euro by those savers who got out of the currency more than a year ago on the back of fears over the euro's future," he said.
However, Mr Slowey, who advises personal and corporate customers where to put their money on deposit, said that over the last couple of weeks, clients had become concerned again about the stability of the euro – and the safety of Irish banks.
"Goings-on in Cyprus have dealt another blow to depositors' confidence," he said, and added that "a small, but growing number" of savers had expressed an interest in moving money outside Europe "to ensure they cannot be touched", should a similar situation to that evolving in Cyprus occur in Ireland.
Last week, AIB reported full-year losses of €3.6bn. The bank said that its restructuring phase was over and that it was on track to return to profitability next year. "We are seeing signs of stabilisation but we need to see a prolonged period of stabilisation before we can really say we have turned the corner.
There are, however, signs of improvement in the economy. We are seeing growth in sectors such as export and FDI and also in some domestic retail sectors," Mr Duffy told the Sunday Independent.
The recovery of the domestic small business sector is key to any future economic growth. Small business has been throttled by restrictive bank lending since the economy crashed.
"In 2012 we exceeded our SME lending target of €3.5bn. Full-year approvals totalled €4.8bn, and we are very confident of meeting our planned target for 2013, he added.
"We are seeing increased demand in the first quarter of this year for new funding from our SME customers. This is coming from the agriculture sector, where there continues to be strong evidence of investment, and also demand across a diverse range of sectors such as manufacturing, retail, medical and services.
"This is an encouraging trend in terms of customer confidence and the likely positive impact it will have on economic activity. Key to demand and economic recovery on SME is finding solutions for customers in difficulty, which we are working on as a priority," he said.