ICS records 6% rise in pretax profits to more than €138m

BANK OF Ireland-owned mortgage lender ICS Building Society recorded a 6 per cent increase in pretax profits to €138.1 million in 2007, a decline from the 14 per cent rise in profits posted the previous year, as lending slowed.

Loan growth slowed dramatically during the year as ICS increased its mortgage book by €200 million in 2007, compared to €1.1 billion the previous year.

The mortgage book rose 4 per cent to €6.49 billion in 2007, compared to a 19 per cent rise the previous year, reflecting the slowdown in the housing sector and the residential mortgage market.

ICS processes mortgages for Bank of Ireland. Total mortgages at the bank and ICS in the Republic rose 11 per cent to €26.9 billion, while total assets at ICS increased 19 per cent to €10.2 billion. The building society sells mortgages through brokers and its chain, The Mortgage Store, which has eight outlets in Dublin, Cork and Waterford.

Deposits at ICS grew by 31 per cent to €5.25 billion in 2007, while total income rose 6 per cent to €170.9 million. The lender's cost-income ratio fell to 18.6 per cent from 19.1 per cent. Total costs rose 4 per cent to €31.6 million.

Joe Larkin, managing director of ICS, said its performance was "satisfactory" and 2007 had been "a very good year for ICS in a changing environment".

"The performance was achieved against a backdrop of increased competitor activity and a slower economic environment," he said.

He said ICS was well funded with a very successful mortgage-backed securitisation "coupled with strong inflows from customer accounts and the lines of credit available to the society from its parent, Bank of Ireland Group".

Losses on bad loans amounted to €1.1 million in 2007. ICS said it had a liquidity ratio of 50 per cent which was well in excess of the requirements, said Mr Larkin.

Brendan Nevin, who has been appointed director of personal lending at Bank of Ireland, will replace Mr Larkin as managing director of ICS next week.