Allied Irish Banks, which has a large operation in Birmingham, has said it sees profit growth in all its divisions and at an overall group level this year and next.

In a trading statement yesterday, AIB added that it expected income to rise three per cent faster than costs, and that it is targeting earnings per share improvement of 13 per cent, in line with announcements in August.

"The earnings target underlines the resilience of our franchises and underpins our confidence in the future," it said, although it admitted - like its banking peers - that it is "not immune" from the current credit crunch even though its exposure to the US sub-prime market is low.

AIB said that while the cost of funding had increased, this would not have a significant effect on its 2007 performance, and that the deposits and wholesale funding provide it with 100 per cent liquidity. It added that it still has sufficient funding to support planned growth.

The group added that its investment banking division was "on track to deliver significant operating profit growth this year," and its capital markets division - despite the current 'credit crunch' currently freezing the market - is also expected to push profits ahead. The bank said it expected its loans and deposits at its UK division to increase by around 20 per cent this year.

Meanwhile, the bank's Birmingham office announced that it was funding a new £4 million development in Kings Norton for adults with learning difficulties.

The 1.62 acre development, situated at Primrose Hill Farm, Meadowsweet Avenue, is to be developed into a self-contained care village by local company Care Through The Millennium.

The development, which started last month, will be completed in 12 months over three stages. Stage one is to develop three linked blocks, each comprising six beds, stage two is to develop two further six bed blocks and stage three is for one further six bed block and one three bed block.

Chris Higgins, the owner of Care Through The Millennium, said: "This is an extremely important development for CTTM and will stand as a benchmark for care home provision for adults with learning difficulties anywhere in the country."

Jackie Nikolich, AIB's manager of corporate business, said the CTTM's track record had been a driving factor in the bank's decision to back the scheme.