Bank of Ireland has made a profit for the first time since the Irish property market collapsed ignominiously in 2008.
The bank, one of Ireland's biggest lenders and its only bank to escape state control during the financial crisis, made an underlying pre-tax profit of 327 million euros ($438 million) in the first half of 2014, up from a 395 million euros loss during the same time in 2013.
The apparent reversal in fortunes was mainly down to the bank re-evaluating its loan portfolio, and selling off some of its Irish sovereign bonds. Yields on Irish sovereign bonds have plunged in the past year, as the country officially exited its euro zone bailout.
Richie Boucher, chief executive of Bank of Ireland, said the results were due to 400 million euros being removed from the bank's impaired loan portfolio.
Ireland and its economy have moved from basket case to poster boy for austerity, since its bailout by international lenders. Ireland's long-term borrowing costs (as measured by the 10 year bond yield) even fell below that of the U.S. briefly this year.
Boucher said he didn't believe valuations have gone too far.
"It's a recovery but from a low base, and the rules of small numbers apply. It's a sustainable recovery," he told CNBC.
"We are not complacent about what it is – there are a lot of challenges for the country and the bank."
Allied Irish Bank (AIB), Bank of Ireland's closest peer, also announced a profit for the first half this week.
- By CNBC's Catherine Boyle