Bank of Ireland is set to pay a dividend for the first time since the financial crisis, even though profits slipped in the first half.
Underlying profit for the six months to 30 June was €480m (£429.2m), 14 per cent down on the same time last year.
But the company said it would return to paying dividends in the first half of 2018, having previously delayed the move due to volatility in its pension deficit.
Growing inflation and interest rates have since reduced uncertainty over pensions, while its net interest margin increased, putting the bank in a stronger position.
It has not paid out a dividend since the 2008 financial crisis, when it had to be bailed out by the government.
The bank also maintained its position as the largest lender to the Irish economy, stating that group new lending reached €6.6bn and that its core loan books continue to grow.
Residential mortgage lending in Ireland grew by over 30 per cent with an increase in new lending market share to 26 per cent.
Other key performance indicators signalled financial strength. Bank of Ireland's exposure to non-performing loans also fell. Its common equity tier one ratio – its core equity capital compared with its total risk-weighted assets - increased to 12.5 per cent.
Outgoing chief executive Richie Boucher said: "Our customer base is growing and customer satisfaction scores are increasing as we invest in our customer propositions, in supporting business growth and in our infrastructure."