Bailed-out Bank of Ireland said on Thursday that its net losses narrowed to 609 million euros ($883 million) in 2010 but warned of "challenging" times ahead as it seeks to raise fresh capital.
"For the twelve-month period ended 31 December 2010, the group made... an after-tax loss of 609 million euros," BoI said in its results statement.
Net losses stood at 1.76 billion euros in 2009.
For 2010, the bank suffered a pre-tax loss of 950 million euros, after 1.81 billion euros in 2009.
Ireland has been forced to bailout its banking sector after years of reckless lending. The country, once a boom story, has been hammered by the international financial crisis and collapse of a domestic property bubble that has seen house prices plummet about 60 percent since 2007.
BoI chief executive Richie Boucher on Thursday said "trading conditions in the first months of 2011 remain challenging due to higher funding costs, in particular the cost of (falling) customer deposits, and the continuing difficult liquidity environment."
Last month, Ireland's central bank ordered a drastic overhaul of the nation's stricken banking sector as the cost of bailing out its lenders was set to top 70 billion euros.
Under the shake-up the central bank has decided that BoI -- about 36-percent state-owned -- must raise fresh capital of 4.2 billion euros.
"The group is working with its advisors on initiatives to seek to address the revised capital requirement ... in order to minimise the investment needed from the Irish taxpayers," BoI said.
"The minister for finance has stated that the group will be provided with time in order to generate as much of the capital as possible from private sources.
"We expect to be in a position to make an announcement on our capital plans in the coming weeks," the bank added.
BoI will to form one of the two new "pillars" of a dramatically reduced Irish banking sector, the central bank announced last month.
Under the restructuring, BoI will stand alone while Allied Irish Banks (AIB), which Tuesday announced 2010 losses of 10 billion euros, will merge with building society EBS.
BoI said it sold assets worth 9.4 billion euros to the state's "bad bank", the National Assets Management Agency, in 2010.
The bank's results came as the central bank lowered slightly its forecast for growth in 2011, saying it expected the indebted eurozone nation to expand by 0.9 percent this year instead of 1.0 percent.
Formerly known as the Celtic Tiger for roaring growth spanning almost a decade from the late-1990s, the Irish economy has contracted for the last three years.
The central bank said that although the economy was set to return to growth in 2011, "for many people there is likely to be little sense of improvement in their economic situation" because of a tough jobs market.
Source: AFP Global Edition