Bank of Ireland has said the worst is now behind it and it is close to profitability.
The bank today reported a loss before tax of €504m for the first six months of the year, compared to a loss of €1.26 billion the same time last year.
Impairment charges on loans to customers fell from €941m in June 2012 to €780m at the end of June this year, down 17%.
Its total income in the first half of 2013 rose by 36% to €1.188 billion, mainly due to an increase in its net interest margin and lower Eligible Liabilities Guarantee fees.
The bank's net interest margin - a key metric that shows how profitable its lending is - jumped 31 basis points to 1.65% in the six-month period.
With provisions for impaired loans falling, mortgage arrears growth slowing and the bank comfortable with the resilience of its deposit base, Chief Executive Richie Boucher said the 15% State-owned lender was on the mend.
"It's been a hard four years," Mr Boucher said. "But we now have a normalised bank which has strong momentum towards profitability. We are in the more pleasant place of having the challenges of ordinary businessmen and women,'' he added.
Underlying operating profits, before impairment provisions, rose to €380m in the first six months of the year, up €343m the same time last year.
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Bank of Ireland said the proportion of owner-occupier mortgages in arrears over 90 days grew in the six months to 10.52%, compared to 9.88% at the end of last year, reflecting the continued impact of the general economic downturn.
Buy-to-let mortgage holders in trouble for more than 90 days rose to 26.01% from 23.36% at the end of last year due to the impact of borrowers on rising repayments as interest only periods come to an end.
The bank said it is "actively working" with its challenged Irish mortgage and SME customers on restructuring their loans, adding that good progress is being made.
"Our expectation continues to be that impairment charges will reduce from the current elevated level, trending over time to a more normalised impairment charge, as the Irish economy recovers," Mr Boucher said.
He said that while the economic outlook has improved, it remains challenging and the group continues to navigate difficult issues.
"However, with the expiry of ELG; through our increasing ability to manage the volumes and pricing of our loans and funding which is giving strong momentum to our net interest margin and growing our income; our focus on tight management of costs and the ongoing reduction in impairment charges, we believe that we are entering a more positive phase in the group's progress," Mr Boucher said.
Average staff numbers at the bank fell to 11,998 at the end of June from 13,429 the same time last year. Staff costs fell by €37m to €351m due to redundancies at the bank.
Breaking down its divisions, Bank of Ireland reported an underlying operating profit - before impairment charges - of €159m for its Retail Ireland division, while its Bank of Ireland Life unit reported operating profits of €40m.
Its Retail UK division's underlying profit jumped to €77m from €2m the same time last year, while profits at its Corporate and Treasury's division rose to €305m from €243m.