PROFITS AT Investec Ireland, the Irish subsidiary of international specialist banking group Investec, jumped by 20 per cent to € 29 million in the six months to September 30th, 2008, as the bank's treasury business benefited from volatility on global currency markets.

Year-on-year, the bank's revenues increased by 20 per cent and its loan book grew by 16 per cent.

Michael Cullen, chief executive with Investec, said that greater volatility in exchange rates led to a significant increase in business in the bank's capital markets and treasury divisions, as corporates looked to hedge their currency exposures. He attributed 70-80 per cent of the firm's profits to these businesses. The bank's international structured equity business also grew, benefiting from increased activity among hedge funds.

However, Mr Cullen noted that the overall environment remains challenging, and that new business levels in the bank's private banking division fell by about 60-70 per cent. Investec reported no repossessions on mortgages provided by its subprime lender, Nua Homeloans, in the six-month period. Mr Cullen said that the bank had no specific impairments on its home loans but had booked a general loan loss provision of € 500,000 on the lender's € 104 million loan book at September 30th. He said that Nua was relatively new to the market, having started providing loans to customers in April 2007.

Investec has traditionally been very conservative when it comes to funding, and as of the end of September it had a loan to deposit ratio of 83 per cent. However, Mr Cullen said that in light of the on-going credit crisis, its €700 million loan book is now 100 per cent funded by Irish retail and commercial deposits. Mr Cullen expects the end of year out-turn to be above 2007's level of €33 million.