Ulster Bank has reported an operating profit of €84m for the first half of 2014.

The bank – which is majority owned by the British state through its parent company Royal Bank of Scotland – said impairment losses had reduced by €543m, or 89%, compared with the same period of last year.

A 0.5% improvement in Ulster Bank’s net interest margin, along with a €27.2m reduction in costs, had also boosted its profit line.

The figures do not reflect the impact of €10.8bn worth of assets, which were transferred from Ulster Bank to RBS’s internal ‘bad bank’ in the last quarter of 2013.

Ulster Bank said it had seen a significant increase in new lending during the six month period, with new mortgage activity up 44% year-on-year and £650m of new business lending made available.

The bank also reported an increasing move by customers away from the branch network, with 86% of its activity now taking place via what it termed “direct channels” such as online and mobile.