Bank of Ireland has said that while trading conditions in the first quarter of 2011 continue to remain challenging, it believes that the Irish economy has begun to stabilise.
In an interim management statement issued this morning, the bank said that it has seen improvements in its loan to deposit ratio and has reduced the amount it has borrowed from lenders such as the Central Bank.
"While competition for deposits has persisted, our customer deposits are marginally higher compared to 31 December 2010," the banks said.
The bank's loan to deposit ratio, which was 175% on December 31, has improved by circa 10 percentage points.
"Wholesale funding jas reduced from the €70bn on December 31 with net drawings from Monetary Authorities and other liquidity facilities provided by the Central Bank also reducing," the bank said.
BoI said that the domestic economy remains weak with low levels of domestic investment, weak consumer sentiment, and elevated levels of unemployment.
"However, GDP in Ireland is expected to gradually recover in 2011 due to the strong performance of the export sector.
"The growth in the export sector has led to a rebalancing of the economy resulting in a positive balance of payments surplus in the second half of 2010 with this situation expected to prevail for 2011.
"In the UK, despite concerns regarding inflation and the impact of fiscal austerity, modest GDP growth is expected for 2011."