Anglo Irish Bank said today it would meet market expectations for the current year and issued an upbeat outlook for 2009.
However, it warned that market conditions would remain tough and said it would keep a tight hold on new lending, focusing on managing asset quality and building its capital base.
The residential property market in Ireland is also set to come under the bank's focus as tightening credit conditions continue to have an impact on the sector. Residential property, which accounts for about 7 per cent of Anglo Irish's total loans, has been flagged by the bank as the principal risk to future impairment.
In its interim statement, Anglo Irish predicted its core equity will grow by more than 20 per cent for the year ended September 30th, 2008.
The bank said it expected a lending impairment charge of between 0.13 per cent and 0.18 per cent, and controlled loan growth of about 15 per cent for the year. The second half of the year would account for about 5 per cent, it said, as it took a "cautious and selective approach" to new lending.
The bank said the expected rise was due in part to strong internal capital generation.
Customer deposits are expected to represent about 60 per cent of total funding.
"Against the backdrop of difficult market conditions, Anglo Irish Bank will report another very good performance in 2008," said David Drumm, group chief executive.
"We remain focused on carefully managing the Bank's balance sheet and continuing to generate recurring and sustainable profits. We believe that this consistent and disciplined approach to business will continue to deliver for shareholders."
The bank is predicting growth of 15 per cent in earnings per share for the year, in line with the expections of analysts in the market.
Looking ahead, the bank said it was confident it would remain "highlighy profitable", even in the current economic climate.
"As virtually all lending is secured by tangible collateral, our total provisions comfortably exceed our net exposure to impaired loans," it said.
"Furthermore, even allowing for a lending impairment charge in line with the 2009 market consensus of 0.7 per cent, some four to five times the anticipated current year level and above management expectations, the Bank would remain highly profitable and capital accretive in 2009."
