Allied Irish Banks, rescued during the financial crisis, said on Thursday that its losses after tax narrowed by almost a third in the first six months of 2013 compared with the outcome a year earlier.
Losses after tax amounted to 758 million euros ($1.006 billion) in the six months to the end of June, compared with a net loss of 1.054 billion euros in the equivalent period of 2012, the bank said in a results statement.
The almost entirely state-owned bank had an operating profit of 162 million euros before provisions for bad loans, in comparison to an operating loss of 110 million euros in the same reporting period last year.
AIB, one of Ireland's biggest banks, is almost fully state-owned after receiving enormous government bailouts.
Ireland's banking sector has been left battered by the global financial crisis, which in turn led to a massive EU-IMF bailout of the eurozone nation in November 2010.
AIB's chief executive David Duffy described the interim results as encouraging, adding that he expects the positive performance to continue.
"We are mid-way through a three year plan to return to sustainable profitability. While we have met our key strategic objectives to date, we acknowledge the continuing challenges that lie ahead," Duffy said in the earnings statement.
He added: "We are seeing a steady improvement in our operating performance ... I expect that overall progress made in the first half of 2013 will continue through this year."