Bank of Ireland has reported a pre-tax profit of €399m for the first half of 2014.

That includes an €87m one-off gain due to changes in its defined benefit pension scheme.

Excluding this and other items which are not part of its core day-to-day banking operations its underlying profit for the six month period was €327m.

The bank said its return to profitability was driven in part by a reduction in the level of write downs on bad debts.

Bank of Ireland's first half impairment charge fell 43% to €285m in the six months to the end of June.

Speaking on RTÉ's Morning Ireland, chief executive Richie Boucher said falling impairment charges were a factor in its return to profit, but rising revenue also played a part.

“At the very top line we’ve got revenues which are up 24% to €1.5bn, a very significant contributor to that has been our lending,” he said.

“Non performing loans have continued to reduce, and even though we’ve kept prudent coverage ratios the impairment charges have come down, and that’s obviously come through to our capital.”

Mr Boucher said the bank had undertaken new lending of €4.5bn during the period – €2.5bn of which was from its Irish business.

Asked if rising property prices suited the bank due to its impact on negative equity levels, Mr Boucher said the trend was helping to reduce the scale of the issue.

“The negative equity in our own book is €2.6bn, that’s down from €3bn in December,” he said.

However he said the majority of those customers were still meeting repayments, with their capacity to do so – and not the price of their property - the most important factor to the bank.

“So negative equity isn’t necessarily a driver of repayment capacity for customers, in fact we see a limited correlation between that,” he said.

Bank of Ireland also said that for more than eight out of ten Irish mortgage customers who have agreed a restructured repayment scheme the conditions are being met.