Bank of Ireland’s pre-tax profit increased to €725 million in the first six months of this year compared with €399 million for the same period of 2014.
The bank said higher net interest income, strong growth in other income, and significantly reduced loan impairment charges all contributed to the improved profit performance.
Bank of Ireland also indicated that it was working towards being able to restore a dividend payment to shareholders some time after July 2016.
It is currently planning to derecognise some €1.3 billion in preference shares that date from 2009, when it was bailed out by the Government. These were previously held by the State but are now owned by private investors and the bank is planning to pay them off between January and July of next year.
“After that, our intention continues to be to progress towards dividend payments,” the bank said.
The State continues to own just under 14 per cent of Bank of Ireland.
Bank of Ireland’s total income rose by 19 per cent to €1.76 billion while its net interest margin widened to 2.21 per cent from 2.05 per cent previously. The bank closed the period with a cost-income ratio of 50 per cent.
Its gross new lending increased to €6.5 billion in the six months to the end of June, up from €4.3 billion a year ago.
The bank’s impairment charges reduced in the trading period to €168 million from €444 million for the first half of last year.
The volume of defaulted loans reduced by €1 billion year-on-year to €13.3 billion. This has fallen by €5 billion or 27 per cent from its peak in June 2013.
Commenting on the results, chief executive Richie Boucher said: "We have grown our new lending by 50 per cent and we continue to be the largest lender to the Irish economy. We also generated capital at a significant pace and further improved our asset quality."
The bank said all of its trading divisions were profitable in the six months to the end of June.
Bank of Ireland continues to generate capital at a “significant pace”, with a 180 basis points increase to 11.1 per cent in its fully loaded common equity tier 1 ratio. This excludes the 2009 preference shares.
The bank said the Irish and UK economies were both performing well, providing a positive backdrop for the business.
“The outlook for both the Irish and UK economies remains favourable, albeit we continue to be conscious of elevated geopolitical risks,” it said.
Bank of Ireland said its New Ireland life subsidiary performed well in the six months, with new business up 7 per cent.
In the UK, its partnership with the UK Post Office continues to grow with the franchise having 2.8 million customers.
Its new lending in Britain doubled in the period to £1.3 billion. The bank continues to run down its corporate and business banking loan books in the UK, as per an agreement with the European Commission.
