AIB chief executive David Duffy has told the Oireachtas Finance Committee that strategic defaulters represent around 4 per cent of its overall mortgage book.

Mr Duffy also said approximately 2,000 customers in arrears have cash deposits big enough to clear their debts.

He said the bank had reached “permanent” resolutions with 4,400 mortgage holders

He said the bank had also made offers to 12,500 customers in relation to resolving arrears. He said the bank had issued 153 split mortgages.

Mr Duffy said the bank had issued more than 5,000 legal letters to customers, although he said this was not the same as saying these customers were facing repossession.

He added that the bank had made more than 8,000 long term offers to customers in second quarter of this year.

He said a quarter of all buy-to-let mortgages have not made any repayments in the last six months, and Mr Duffy added that some were diverting rental income.

Mr Duffy said his job was to make Insolvency Service of Ireland head Lorcan O’Connor “redundant”.

On the investment side of its business, Mr Duffy said the bank has found 1,000 accounts where buy-to-let investors had intended to use rental income to pay for their lending but are now using the money for other needs.

Mr Duffy is the first of the country’s top bankers up before the Oireachtas Committee on Finance to discuss the financial services sector and activities within the four main lenders.

Committee chair Ciaran Lynch said the meetings aim to help find sustainable, long-term solutions to the mortgage crisis and measures to ease the burden on struggling homeowners and distressed borrowers.

Last month, the Central Bank revealed that 98,000 mortgage holders were in arrears by 90 days or more at the end of June.