The level of defaulted loans at Bank of Ireland has continued to fall, according to an interim management statement by the bank, with customer deposits and new lending continuing to increase.

The level of defaulted loans on the bank’s books stood at €16.4bn by the end of September.

This was down €1.9bn on June 2013, which the bank said was the point at which its defaulted loans peaked.

This reflected improved conditions in the Irish and British economies, according to the bank, as well as the work being done directly with customers.

Bank of Ireland said it has continued to trade in line with it expectations in the last quarter, helped by an increased net interest margin at the group as well as lower funding costs.

The group said its gross new lending had continued to increase, though repayments have continued to exceed these new loans, pushing the value of its loan book down slightly to €83.3bn.

Meanwhile, customer deposits stood at €75bn by the end of September – up slightly on the previous three months.

In its statement, Bank of Ireland also noted the results of the European Central Bank’s Comprehensive Assessment and said it has continued to improve its capital ratio in recent months.