Annual profits at Anglo Irish Bank rise 56% to £70 million

Anglo Irish Bank has put in a strong performance, reporting a 56 per cent rise in pre-tax profits to €89.1 million (£70.2 million) in the 12 months to the end of September. The figures were above expectations and the bank is confident it can sustain further good growth into the future.

Its lending, deposit-taking and fee-based activities in the Republic, Britain and Austria all performed well, with a number of acquisitions adding to the scale of core operations during the 12-month period.

Announcing the results yesterday, the chief executive, Mr Sean FitzPatrick, said it was now in a position to further increase its market share in each of its core areas with the potential to grow profits by up to 20 per cent over the next two years.

In spite of the good news, Anglo Irish Bank shares finished the day lower in Dublin, falling five cents to close at €2.35. While analysts were broadly very optimistic about the bank's prospects, the shares were affected by the general lack of interest in smaller stocks.

Shareholders will be paid a final dividend of 3.6p (4.57 cents) per share on the back of the results. The total dividend for shareholders for 1999 comes to 5.7p, a 17.5 per cent rise on the previous year.

After tax, the bank's profits rose by 58 per cent to €74.4 million and total assets increased by 43 per cent to €7.9 billion.

Some 75 per cent of Anglo Irish Bank's profits were generated in the Republic, with 20 per cent in Britain and around 6 per cent from its private banking operations in Austria.

Mr FitzPatrick stressed that the bank has maintained its strict credit assessment criteria throughout the year, stating the substantial growth in lending had not been achieved at the expense of increased credit risk.

It has made a specific provision of €14.3 million and a general provision of €22.4 million for bad debts in its 1999 accounts, up from €7.4 million and €6.8 million in the previous year to reflect the surge in lending.

During the year Anglo Irish Bank added several acquisitions to its operations - the Smurfit Paribas lending and fund management businesses in the Republic and the Hypo Vereinsbank loan portfolio in Britain, the Credit Lyonnais private banking operation in Austria, the Mees Pierson trust business in the Isle of Man and the Hambros foreign exchange portfolio in London.

Mr FitzPatrick said the acquisitions are now well bedded down and signalled that any future acquisitions are likely to be in the British market.

"We are only interested in companies which are in the same line of business as ourselves. There is not much available in the Republic for us, so we are likely to intensify our efforts there. We are well positioned to take advantage of potential acquisition opportunities as they arise," he said.

Anglo Irish Bank had considered bidding for the State-owned ICC Bank earlier this year but decided against it. Mr FitzPatrick said he was satisfied the bank had made the correct decision.

"Paying a price of more than £160 million would not have been good for our shareholders because of the onerous conditions attached to the sale." Bank of Ireland is the sole bidder for ICC Bank and should shortly learn whether the Government will accept its bid.