National Irish Bank (NIB) has reported a pretax loss of of €161 million for the first quarter of the year as income fell and €172 million was set aside to cover impaired loans.

The impaired loans were mainly in the bank's commercial property loan book, which accounts for some €3.3 billion of its €9.3 billion loan book. The total loan book fell by 9 per cent year on year.

The bank said the quality of its €3.5 billion mortgage book was "satisfactory".

Operating profit at the bank before impairment charges fell 18 per cent to €11 million in the first three months of the year, and reduced consumer demand for loans also helped to contribute to a 17 per cent fall in income to €35 million.

However, the bank attracted an increasing amount of customer deposits, which rose by 31 per cent compared to the same period in 2010 to €5.7 billion.

A restructuring programme saw NIB reduce costs by 17 per cent to €24 million

Chief executive of NIB Andrew Healy said the results reflected a "very difficult environment", but also highlighted the importance of the bank's restructuring programme.

"Loan impairments of course remain very high and will continue to be heavily influenced by economic conditions, property values in particular. This said, we hope to see these numbers trend downwards over the coming quarters," he said in a statement.

Mr Healy said the bank welcomed the Government's efforts to bring "greater certainty" to the banking industry.

Pretax profit at NIB's parent group Danske Bank rose by 8 per cent to €201 million during the quarter. The bank saw operating profit slide by 23 per cent, however, to €582 million, and set aside €381 million for loan impairment charges. Danske bought NIB in 2005.