Bailed-out Allied Irish Banks (AIB) has announced operating losses of 2.8 billion euro for 2012.
The bank also revealed 9.1% of its private residential mortgages were in arrears of more than 90 days.
AIB chief executive David Duffy said while 2012 was a challenging year, the bank was on track to return to sustainable profitability during 2014.
"AIB has now largely completed the restructuring phase of its strategic plan as the bank targets a return to sustainable profitability and growth during 2014," Mr Duffy said. "While 2012 was another very challenging year for the group, a number of important steps were taken to position the bank for recovery over the longer term."
The bank said its 2.8 billion euro of losses for 2012 were down 65% from 8.1 billion euro the year before. It also revealed a 29% reduction in its reliance on funding from the European Central Bank, dropping from 31 billion euro at the end of 2011 to 22 billion at December 2012.
In its annual results report, AIB said 17.7% of buy-to-let mortgages were in arrears of more than 90 days.
Mr Duffy insisted recent targets set by the Central Bank of Ireland for banks to deliver sustainable solutions to customers in mortgage distress had been adopted. He said supporting small and medium-size enterprises would also be a focus for AIB.
"Assisting both SME and mortgage customers in difficulty will continue to be a major priority for this year," Mr Duffy said. "AIB intends to meet or exceed the recently announced Central Bank of Ireland 2013 sustainable mortgage solution targets as part of ongoing efforts to deal effectively and quickly with customers in difficulty."
Mr Duffy said AIB had no intention of deliberately targeting homes for repossession. He said the bank's aim was to return customers to financial stability. The bank chief added that AIB would consider debt write-offs for people in severe debt, particularly those in the buy-to-let sector.
"Every individual is going to be restructuring in a way that is customised to their particular debt situation," Mr Duffy told RTE Radio. "But where there is debt in some cases that is completely unsustainable, then we would consider write-offs, yes."