Bank of Ireland reported a 97 percent plunge in full-year profits Tuesday, citing a rising tide of defaulting loans that has spurred the bank's governor to resign.
Still, the figures were better than investors feared and the company's shares soared 27 percent to 1.37 euros.
Ireland's second-largest bank said net profit for the fiscal year ending March 31 fell to 59 million euros ($80 million) from 1.69 billion euros a year ago, reflecting its high exposure to Ireland's recession-ravaged economy and collapsed property market.
The bank recorded a profit thanks to net tax credits reflecting its recent losses.
The bank recorded a full-year pretax loss of 7 million euros — its first in corporate history.
Analysts said they had expected worse and compared Bank of Ireland's debt and cash position favorably with its bigger rival, Allied Irish Bank.
Both banks have just received matching 3.5 billion euros bailouts from the government and are expected to sell dud property loans to a proposed government-run "bad bank" called the National Assets Management Agency.
Investors also welcomed Bank of Ireland's announcement Tuesday that it wants to buy back up to 1.4 billion euros in its international debt obligations — but only if bond-holders agree on a reasonable price.
The bank's chief executive, Richie Boucher, said in a telephone interview he was "very keen" to negotiate the discounted sale of loan liabilities to the still-forming agency.
And Boucher, who took charge in February after the surprise resignation of Brian Coggin, rejected widespread speculation that the government bailout would not be sufficient to save both Bank of Ireland and Allied Irish from eventual nationalization.
"I don't see it as inevitable," Boucher said, noting that Finance Minister Brian Lenihan considers nationalization "a very last resort." He said nationalization would not give the bank easier access to capital, and it would increase Ireland's already runaway budget deficit.
Allied Irish rose 14 percent to 1.23 euros.