Ulster Bank turned the corner yesterday with its first profits since 2009, marking the end of five years of heavy losses for Northern Ireland's biggest bank.
The bank's all-Ireland results showed operating profit of £17m for January to April, contrasting with losses of nearly £1bn for the last few months of 2013.
The bank's chief executive Jim Brown said there had been "progress across all areas of the bank", which is part of the 82% taxpayer-owned Royal Bank of Scotland (RBS).
Ulster Bank said it had managed to cut bad debts by 80% with "significant reductions" in its mortgage, corporate and small to medium-sized business portfolios.
Its ability to recover from the financial crisis had been crippled by bad debts – also known as impairment losses – after lending large amounts to enable customers across Ireland to buy property, which then fell in value in the property crash.
But the bank said it had addressed the problem of impairments by investing in programmes to support customers in financial difficulty.
RBS said improving mortgage arrears and rising house prices in Ireland were also helping reduce impairments.
Mr Brown said: "The operating profit of £17m is driven by stable revenues, a reduction of underlying expenses and an improvement in impairment losses.
"Improving customer demand, our ongoing focus on underlying expenses and the benefits of our work in helping our customers in mortgage arrears will continue to drive the momentum in the recovery of our business."
Underlying expenses at the bank were down – but setting up a new bad bank, the RBS Capital Resolution (RCR) division, along with the impact of a new bank levy in the Republic, had triggered a £10m increase in headline expenses.
But Mr Brown said he expected further falls in underlying expenses as costs came down across the business.
He added: "With our renewed focus on customer service and building a really good bank for our customers, we have seen a good response to our YES campaign for mortgage customers this quarter and a strong pipeline in business lending as a result of the Ahead For Business series of events across Ireland.
"We are focused on sustaining the recovery of our business which must be built around providing the best customer service on the island of Ireland."
Ulster Bank parent RBS trebled its profit to £1.2bn from £400m in the first few months of 2013.
According to some reports, it may sell a stake in Ulster Bank to a US private equity group, merge its Republic of Ireland business with a competitor in Ireland or even float the bank on the stock market.
If the business in the Republic was merged with a rival, it's expected the NI business would be integrated more closely with RBS in the rest of the UK.
Ulster Bank has been dogged by intermittent IT glitches since 2012.
RBS said it had made moves to become a "simpler" organisation, including spending £750m to improve "the safety, security and resilience of our IT systems."