Bank of Ireland (BoI) has scrapped its dividend after pre-tax profits fell by more than a third during the first six months of the lender's financial year.

Ireland's second-biggest bank this morning reported pre-tax profits down 32 per cent from €950 million (£795 million) last year to €650 million for the six months to the end of September 30.

Bank of Ireland said it had no plans to resume paying a dividend until the current financial difficulties have eased.

Richard Burrows, governor of the Bank of Ireland Group, said: "While stockholders have seen a painful fall in the value of their holdings in Bank of Ireland, and regrettably the necessary elimination of dividends, they can be assured that this institution is being managed in a way that has their interests at heart.

"Our strategy in managing our way through this difficult time will ensure the future of the Bank and our ability to continue to support our customers and provide a meaningful return to our stockholders in the medium term.”

In September, Ireland provoked controversy by announcing a €400 billion bailout package to guarantee all savings held in Irish banks as the financial crisis intensified.

Days before the bailout was announced, Ireland became the first eurozone country to fall into recession, bringing to an end more than a decade of prosperity and growth under the Celtic Tiger economy.

Brian Goggin, chief executive of BoI, said the bank remained a strong and successful business.

In a statement, the bank said it expected underlying earnings per share for the second half of the year, to 31 March 2009, to be "marginally better than breakeven".

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