Bank of Ireland has said it expects to deliver a strong full-year performance with growth of 15 per cent in earnings per share when it reports in May. Jane O'Sullivan, Markets Correspondent, reports.

Driven by the continuing positive Irish economic story, and improving conditions in the UK housing market, the bank expects to deliver income growth of around 7 per cent for the year to the end of March.

"We look forward with confidence and believe this momentum will continue next year," chief executive Brian Goggin said.

Analysts welcomed what they described as an "upbeat trading statement" and set about nudging their earnings per share (eps) forecasts up to around 117.6 cent. But shares in the bank lost 35 cent, or 2.3 per cent of their value, to €15.10 in a generally weaker market and as investors took profits.

Bank of Ireland said strong volume growth over the last year would be partially offset by a decline in margins of around 20 basis points, due to factors such as lower interest rates and its product mix.

Costs should be well contained, the bank said, rising by around 3 per cent for the year while asset quality "remains excellent in the continuing benign environment".

The bank also said its restructuring programme was expected to deliver cost savings ahead of the €30 million targeted for this year.

A breakdown of its different divisions shows the bank's life business was the star performer in the year just ending. It is expected to report operating profit growth of around 40 per cent and a rise of more than 60 per cent in pretax profits.

The bank said its retail business in the Republic of Ireland had performed strongly and is expected to deliver profit growth of around 18 in the full year.

An "excellent" performance from its corporate banking business, allied to good performances from its global markets division, Davy Stockbrokers and IBI Corporate Finance, are expected to result in profit growth of around 15 per cent in its wholesale financial services division.

In the UK, Bank of Ireland's business is expected to turn in a broadly flat performance.

The division includes mortgages, business banking and consumer financial services through its joint venture with the UK Post Office.

"We look forward to profit growth next year as we continue to build strong volume growth," Bank of Ireland said of the UK division.

Bank of Ireland Asset Management (BIAM), the fund management division, remains the one blot on the copybook with profits expected to be down by around 30 per cent as fund outflows continued last year.

However, the bank said the pace of outflows had slowed and funds under management at the end of March were expected to be around €45 billion.

This is up from the end-September level of €44 billion but still down on the €47 million under management at the end of March last year.