Lloyds Banking Group said a reduction in Irish asset impairments – losses banks attribute to loans – is one of the reasons its bottom line has moved out of the red. During the first half of 2013, the group’s profit after tax rose to £1.578 billion, compared to a £662 million loss during the same period in 2013.

The value of impaired loans in Ireland decreased by £352 million (2.8 per cent) to £12,149 million.

Impaired loans in Ireland’s commercial real estate sector fell £146 million. The overall value of loans outstanding in this sector decreased £211 million. At almost 38 per cent, commercial real estate represents the largest segment of Lloyd’s loans outstanding to Irish customers. The value of impaired corporate loans also fell by £280 million to about £3.97 billion, more than one-fifth of the bank’s Irish loan book.

On speculation the bank would return to profit in 2013, its shares rose above 61 pence, the level at which the British government says it will break even on its £20 billion rescue investment. It has not been confirmed whether prime minister David Cameron will decide to sell the 39 per cent stake in Lloyds.