According to Richie Boucher, head of Bank of Ireland, the Irish property market is about to hit bottom.

"We think the property market is beginning to stabilise -- in particular in urban areas," he told the Sunday Independent.

"This time last year many of those who had mortgage approval from us were not taking up the mortgages -- as they were still nervous about buying. Now, estate agents are saying there are more buyers than sellers in urban areas."

Boucher, who was appointed group chief executive of Bank of Ireland in February 2009, presented the bank's interim results last Friday.

While the bank's losses  have climbed, peaking at €3.46bn in 2010 and making a €1.25bn loss in the first six months of this year, with most of this loss coming from the €941m the bank has set aside to cover loan losses, the bank expects to return to profitability in 2014.

A prolonged economic downturn, however, could prevent that from happening.

According to the bank's report, ongoing weaknesses in world economies could lessen demand for Irish exports.

"Reduced growth prospects in Ireland's trading partners increases the likelihood of prolonging the ongoing downturn in economic conditions which could further adversely impact the bank's results, financial condition and prospects," said the report.

The Independent reports that for the bank to rebuild profits, it will cut costs and try to increase revenues by selling new products.

"Our balance sheet is reducing by a third, so our costs must be realigned with that," said Boucher. "As we restructure the group, regrettably the number of people that we employ will reduce."

The bank has laid off about 3,700 staff since early 2009. At this time, the bank insists that it has no plans to close any of its 254 branches. However, if the bank fails to increase revenue it will have to reconsider.

In a bid to increase revenue, the bank has launched several products recently, including postgraduate student loans.

"We believe this economy will recover. Students are an important part of what the State invests in, and are good long-term customers for the bank as well," said Boucher. "We are investing more in the agricultural sector. I don't think there is any sector the bank is not interested in (doing business with).

"We are cautious of the construction sector -- but there is demand there. You can't keep on cutting your way to glory -- you have to start to create revenue," he said.