The Central Bank made a profit of €1.4 billion last year, mostly from lending money to the country's troubled commercial banks. Of this, the Government will get €1.1 billion as a dividend.

In its annual report published today, the Central Bank detailed a big increase in its regulatory activities.

Last year banks in Ireland reduced their dependence on funds from the ECB.

Borrowings fell from €108 billion to €72 billion, reflecting deleveraging, deposit gathering and an increase in wholesale market funding.

Central Bank Governor Patrick Honohan said that the bank's major focus last year - and into 2013 - was the restoration of financial stability to the Irish economy.

He said this has been, and remains, a significant challenge.

''However, despite the scale of this task and the backdrop of a weak external economic environment, the overall policy stance is moving things in the right direction,'' he added.

Professor Honohan also said that two of the Central Bank's big work projects came to fruition this year - namely the promissory note deal and a framework for dealing with mortgage arrears.

The Central Bank's 622 regulatory staff had a busy year, as they started 76 market abuse investigations, and increased their investigations under securities law from 30 to 76 cases.

This followed a big rise in the number of reports of suspicious activity by market professionals, which rose from three in 2011 to 19 last year.

Continuing problems in the credit union sector are underlined by the fact that the regulator has restricted 57% of credit unions in the amount of money they can lend, due to a deterioration in their financial positions.

The Central Bank said the lending restrictions are designed to ensure that credit unions do not put the savings of their members at additional risk.

It said the things that influence decisions on lending restrictions include: increasing levels of arrears, concentration risk, inadequate liquidity, inappropriate lending practices and or solvency difficulties.

The Central Bank reminded credit unions of their obligations to make a regulatory return regarding the payment of dividends. It noted that in early 2013 "75% of credit unions proposed only nominal dividends of 1% or less for the year to September 30 2012".

Credit union auditors were also reminded of their obligations in relation to assessing the adequacy of bad debt provisions, maintenance of regulatory reserves and liquidity, and impairment of fixed assets.

Professor Honohan told a press briefing today that the Government must stick to a planned schedule of cutbacks if it is to retain the confidence of markets.

"Full implementation of the Government’s announced budgetary measures remains essential to preserve market confidence," he said.

Professor Honohan said that he does not expect the country to make use of the European Central Bank's OMT bond-buying programme, which will however be available if needed.

"It's there, but I don't see it being needed," Mr Honohan, who is also a member of the ECB's governing council, said.

"At present Ireland is not eligible, but things could be done to change that if needed,'' he added.

He also said that the Central Bank has not yet decided whether to test its banks' financial health this year or wait until pan-European stress tests next year.

"For the moment we are working towards doing it in the latter part of the year,'' he added.