Shares in Anglo Irish Bank soared to a new high yesterday as the niche bank reported a much stronger-than-expected half-year performance and signalled even better growth in the coming months.
The shares traded up to €6.57 during trading in Dublin yesterday before settling back to close at €6.37, a new closing high for the bank. At this price, Anglo Irish Bank is capitalised on the Dublin stock market at around €2 billion, making it the ninth-biggest Irish company. A year ago the company had a stock market valuation of €1.3 billion.
Yesterday the bank announced a 27 per cent rise in profits to €115.2 million in the six months to the end of March, reporting strong growth across all aspects of its Irish and international businesses.
Chief executive, Mr Sean Fitzpatrick, was upbeat when announcing the interim figures, suggesting the second half of the year would be even better for the specialist bank. Earnings per share rose by 20 per cent to 24.71 cents, ahead of analysts' expectations. Mr Fitzpatrick indicated this figure would be exceeded by the end of the bank's financial year.
"We have had a great six months and the next six months will be even better," he said yesterday. Shareholders will receive a 17 per cent rise in the interim dividend to 4.2 cents per share on the back of the strong results.
The bank has recently benefited from credit rating upgrades from the Fitch international rating agency, helping to attract new business and support the share price.
Anglo Irish Bank specialises in the small to medium-sized business sector in Ireland and Britain and also has private banking operations in Austria and Switzerland.
Some 62 per cent of group profits are generated in Ireland with the bank reporting solid growth in core lending and deposit activities. Profits in the Republic rose to €71.4 million from €59.2 million in the six months to the end of March.
The group's results were boosted by very solid growth at its British business, bringing in 25 per cent of Anglo Irish Bank's profits or €29.3 million. Its other operations contributed €14.5 million.
The bank is very bullish about the prospects for the Irish economy over the next two or three years and is confident it can continue to deliver impressive returns for shareholders.
Mr Fitzpatrick said that, while the events of September 11th and concerns about the slowdown in the Irish economy had injected some caution, the Government's decision to restore tax relief on residential properties purchased by investors had injected fresh confidence across the Irish economy.
Its lending in Ireland rose by 12 per cent to just over €7 billion with the bank reporting a good pipeline of business to come in the coming months. In Britain, lending rose by 21 per cent to €5.2 billion. The bank has total provisions for bad loans of €245 million, with non-performing loans worth €94 million. Mr Fitzpatrick said the bank was well cushioned against any deterioration in credit quality although this is not a current concern.
Customer deposits rose by 15 per cent to €11.6 billion. Anglo Irish Bank has taken in up to €60 million under the Government Special Savings Incentive Account scheme and said it had also benefited from the large-scale switch from equities to cash by more cautious investors.
The bank achieved significant growth in fee income earned from its private banking and corporate treasury activities, which rose to €43.4 million from €25.2 million during the six months.
