A £25 million (€31 million) gain on commercial property investments has enhanced profits at the Irish Nationwide Building Society but static lending and competitive pressures continue to eat into core business profits.
Including the £25 million investment gain, the society's pre-tax profits increased from £29.7 million to £50.6 million, an increase of 70 per cent. Excluding this gain pre-tax profits fell to £25.6 million compared with £29.7 million in 1999, a decline of 13 per cent.
A spokesman for the society's managing director, Mr Michael Fingleton, said the investment gains were realised on a long held portfolio of commercial property.
In a rapidly growing economy the society failed to expand its new lending with gross lending of £746 million compared with £749 million in 1999.
The small mutually-owned building society reported a 15 per cent increase in customer accounts to £1.6 billion.
The value of its loan book rose by 21 per cent from £1.7 billion to £2.1 billion. Mortgage lending accounts for around 70 per cent or £1.5 billion of its loan book with commercial lending amounting to £600 million, according to the society. The Irish Nationwide claimed to have a 7 per cent share of the mortgage market in 2000.
Customer accounts increased by 15 per cent to £1.7 billion. The cost to the society of its deposit business increases substantially. It has been aggressively marketing its savings products and last year interest payable to customers rose from £61.7 million to £92.8 million.
Assets grew by 27 per cent to £2.9 billion.
The society's profitability was also affected by a £4.4 million payment to the Revenue Commissioners for deposit interest retention tax arising out of the DIRT Inquiry.
Its cost-to-income ratio continue to fall coming in at 25 per cent. In a statement, Mr Fingleton said it had managed its costs without having to close any of its 50 branches or to lay off any staff.
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