ANGLO Irish Bankcorp is poised for further growth following a better-than-expected 26 per cent rise in pre-tax profit to £24.1 million in the year to September 30th, 1996.
While not making a specific forecast, chief executive Mr Sean FitzPatrick said the group should grow its earnings by 15 per cent compound a year. That growth, he added, would be organic, noting that Anglo would continue to look for acquisitions, in both the British and Irish markets.
Anglo with its strong capital adequacy ratios - total ratio is more than 13 per cent - was capable of acquiring loan portfolios of up to £1 billion, said finance director, Mr Willie McAteer. Asked at yesterday's announcements of the results about further rights issues, Mr FitzPatrick said the bank did not have to "go back to shareholders" over the next three to five years and was capable of growing organically from its existing resources.
Chairman Mr Gerry Murphy noted that the bank had had a target, three years ago, of doubling its size in a five-year period. It had already "comfortably exceeded" this target.
During the next five years "we will voyage into unchartered waters", warned Mr Murphy. Noting the dangers attaching to EMU, particularly if Britain stays outside the system, he stressed that Anglo remained confident. Mr FitzPatrick opined that the downturn in the Irish economy "will inevitably come" but growth would continue over the immediate future.
Future profit growth at Anglo will have implications for dividend payments. Up to now, the growth of dividends has lagged behind the growth in earnings because Anglo wanted to bring the cover up to two times. The cover rose from 1.7 to 2.0 last year. Anglo has conceded that dividend payments should in future broadly equate earnings.
Shareholders are to benefit from the good results, which were somewhat better than expected. A final dividend of 2.2p net per share has been declared, making a total of 3.7p compared with 3.36p previously. This represents a 10.1 per cent increase.
Anglo's net profit increased by 33 per cent, from £14.1 million to £18.7 million, a faster rate, than at the pre-tax level, due to a lower tax charge. Earnings per share rose from 5.70p to 7.46p.
The provision for bad debts fell from £6.8 million to £6.6 million. Non-performing loans amounted to £42 million. And provisions as a percentage of non-performing loans is at a high 93 per cent.
Advances grew by 36 per cent to £1.46 billion while deposits rose by 30 per cent to £2.08 billion. Reflecting business in the pipeline, work in progress grew by 242 per cent to £305 million.