Anglo Irish Bank has delivered a strong first-half performance but cautioned that lending will slow over the rest of the year.
The bank posted a 34 per cent rise in pre-tax profits to €154.5 million in the six months to the end of March, largely on the back of record lending to the small and medium-sized business sector.
During the six months, loans issued to customers rose by 19 per cent to €16.2 billion, the largest increase experienced by the bank since its foundation, according to chief executive Mr Sean FitzPatrick.
"It's been a very strong six months and we are confident that we will deliver a strong outcome for the full year, in line with both the targets we have set ourselves and market expectations," he said.
Anglo Irish Bank shares gained two cents in Dublin yesterday to close at €6.74.
The bank has announced an interim dividend of 4.87 cents per share for shareholders, a 16 per cent increase on the previous year.
The bank's finance director, Mr Willie McAteer, said it had been surprised at the level of demand for lending but noted that some customers were becoming more cautious and had been postponing or moving more slowly in bringing a deal to completion.
The bank earned 58 per cent of its interim profits in the Republic, with the UK contributing 32 per cent, and operations in Europe and the US accounting for the remaining 10 per cent.
Some 54 per cent of lending was in the domestic market, with 39 per cent in the UK and 7 per cent to customers at its operations in Boston, Massachusets.
During the first half, total income rose by 23 per cent to €274 million, of which €202 million was earned from the interest margins on its lending activities.
Anglo Irish Bank has set aside €213 million for bad or doubtful debts, which is a generous for the size of its loan book.
During the six months, the bank had 119 non-performing loans amounting to €115 million, up from €105 million in the same period last year, reflecting some worsening in the economic conditions.
According to Mr McAteer, there were non-systemic bad debts coming through its systems but he said that no one sector was suffering more than any other.
The bank's private banking and asset management businesses fared well, despite the continuing weakness of equity markets. In the period, these revenues increased from €27 million to €32 million.
Mr McAteer suggested the bank could maintain its growth momentum organically and would only consider potential acquisitions that met its criteria. He estimated that the bank could deliver a 15 per cent compound annual increase in profits and effectively double its size in the next five years.
Mr FitzPatrick said Anglo Irish Bank had probably got more than its fair share of business in the first half of the year.
"Things bounced our way. We will continue to do the simple things well," he said.
