Equity Bank profits up 131%

PROFITS at Equity Bank climbed 131 per cent last year to £2.02 million, according to its annual report. In the 12 months to the end of February last, Equity, which is part of the Bank of Scotland group, showed strong growth in its deposit base and in new lending in the Irish market.

According to figures issued yesterday, new business advances rose to more than £100 million over the 12 month period, with total net advances up from £85.7 million in the previous year to £136.5 million.

The group's fee income, largely generated from its commercial lending activities, rose to £950,000, while its deposit base grew to £101 million, according to its latest accounts.

Equity chief executive, Mr Mark Duffy said its bad debt experience during the year was "excellent", with a charge of £627,000 compared with £450,000 in the previous year, mainly reflecting the growth in its general provisions.

While the bank's costs rose by 11 per cent last year, its overall cost/income ratio fell sharply from 61 per cent to 44.5 per cent. Higher costs last year were mainly due to the recruitment of new staff at the bank, which increased its work force from 33 people to 45 over the past year, Mr Duffy said.

Strong growth in all the bank's niche sectors had pushed profits strongly ahead, he said.

Spread across a wide range of sectors, the bank's lending activities were significantly boosted by greater buoyancy in the property sector, which accounts for up to 12 per cent of its loan book.

Despite low interest rates, the bank's association with the Bank of Scotland helped it to attract substantial new deposits, improving its overall funding levels.

It also received approval from the European Investment Bank in 1995 to access its long term fixed rate funding which typically provides fixed rate loans for periods of up to 15 years.

NWS Finance International, a new company set up to trade at the International Financial Services Centre, had been trading profitably, according to Mr Duffy. It specialises in large ticket lending outside the British market.

The bank is currently focusing on starting a new tele marketing banking service, which it expects to be open for business later this year. A new Belfast office is also planned.