Permanent TSB made a pre-tax loss of €922 million in 2012, up from €505 million in the previous year.

However, the group's operating loss before exceptional items was €980 million – compared to a figure of €1.46 billion in 2011 - according to its latest results.

Over €891 million in impairment charges were recorded during 2012, compared to charges of €1.44 billion in the 12 months previous.

Meanwhile, the bank's chief executive Jeremy Masding said fewer customers were falling behind on home loan payments but it was too soon to say the level of arrears has peaked.

"We'd like to say arrears have peaked but we're not at that stage yet," he said.

Permanent TSB's proportion of Irish owner-occupier loans in arrears for more than 90 days was 15% at the end of 2012, while 21% of buy-to-let investors were three months or more in arrears.

Last year Permanent TSB split from its more profitable life insurance arm.

The State-owned bank has said it will do deals with 500 borrowers in arrears in the coming months.

The agreements will see their loans separated into two halves with customers repaying one half while a second portion is set aside, to be dealt with at a later date.

Mr Masding said the bank would write off debt in certain circumstances but he ruled out debt forgiveness.

The bank said it had grown its deposit base by €2.2 billion and cut costs through branch closures and staff redundancies, which would help it return to viability.

It also said it was making €450 million in new lending available during the year, and would launch a free current account product in the near future.

However, Mr Masding warned it would be five years before the bank returns to profit.