A massive uplift in dealing profits helped US banking giant Merrill Lynch deliver a 31 per cent rise in annual pretax profits to $526 million (€412 million) at its main Irish unit.
The group's Dublin-registered vehicle - Merrill Lynch Capital Markets Bank Ltd - took advantage of a benign trading environment last year to deliver a profit before tax of $1.93 million for each of the 272 workers on its core staff.
Other Irish companies in the Merrill Lynch stable bring its total employment here to 560, but the capital markets operation is by far the most profitable.
This unit has strategic importance for Merrill Lynch, which moved only five weeks ago to to simplify its international banking operations.
At that time, the entire business of a British-registered vehicle called Merrill Lynch International Bank, which has significant interests in Singapore, was transferred into the Irish operation.
The directors of the Irish unit include retired civil servant Paddy Teahon, formerly head of the Department of the Taoiseach, and the well-known investment manager Gavin Caldwell. In addition to trading in debt derivatives, the division provides loans and debt products to international clients.
Accounts just filed in the Companies Office indicate that the bank's total operating income rose 42 per cent to $696.44 million in 2005. This followed a rise in dealing profits to $519.6 million from $428.74 million, and a rise to $169.24 million from $107.14 million in fees and commissions receivable.
However, a rise in provisions for bad and doubtful debts to $54.45 million from $2.65 million was instrumental in an increase in operating expenses to $170.73 million from $84.49 million.
Merrill Lynch had no comment on the current trading performance of the Irish unit. After declaring $462.57 million in profits after tax, the directors said that the unit was in a "strong financial position".
Accounts separately lodged for another Irish-registered unit in the US group - Merrill Lynch Financial Services Ltd - show that it reported a slight rise in pretax profits to $4.83 million last year from $4.18 million in 2004.
This business carries out a financial services support function for affiliates of the Merrill Lynch group.
The latest filing for the Merrill Lynch companies comes as it prepares to enter a joint venture with Irish Life & Permanent in which it will concentrate on the "non-conforming" mortgage market. This business, which is likely to open in the new year, will offer home loans to clients with poor credit records.
In a note yesterday, NCB Stockbrokers said the performance of this segment of the British market suggests there was significant potential - around €2 billion to €3 billion - in Ireland.
