Shares in Bank of Ireland rose 45 cents to close at €9.85 after the group reported half-year results ahead of market forecasts. After the bank's trading statement in September, the consensus forecast was for flat profits on €564 million (£444 million), but Bank of Ireland came in with profits of €572 million.
The 1 per cent rise in first-half profits would have been 7 per cent were it not for a €26 million hit on its life and pensions embedded value as a result of the fall in equity markets and goodwill that was written off.
Earnings per share were 4 per cent higher, while there was a 23 per cent increase in the interim dividend to 11.6 cents.
Shareholders, however, are not being offered a scrip dividend and will have to take payment in cash.
Profits from Irish retail banking operations rose 10 per cent to €168 million, with a 17 per cent growth in lending and 15 per cent growth in deposits.
Corporate and treasury was the best performing part of the business, with a 20 per cent rise in profits to €218 million - mainly due to a 20 per cent increase in net interest income to €235 million.
Corporate banking profits were marginally lower on €51 million, but this was more than compensated for by a 44 per cent increase in profits to €118 million at treasury and international banking, Davy Stockbrokers, IBI Corporate Finance and First Rate. The big gains in treasury profits were also due partly to a €20 million exceptional trading gain.
Profits at the life and pensions operations fell 25 per cent to €44 million, but this was due to the embedded value hit. Sales of life and pensions products were 37 per cent higher, with profits on new business up 17 per cent to €28 million, while profits on existing business were 15 per cent higher on €30 million.
In Britain, where the Bristol & West mortgages subsidiary has been expanding aggressively into fee-based activities, pre-tax profits fell 11 per cent to £63 million sterling (€102 million).
This, however, includes £11 million associated with the investment in the MoneyeXtra subsidiary.
When this is excluded, profits actually rose to £74 million.
At Bristol & West, 47 per cent of income is now derived from specialised lending and fee-based activities, up from 25 per cent 18 months ago and ahead of the plan for more than 50 per cent of income to come from non-mortgage activities by 2003 or 2004.
The chief executive of the bank's retail banking operations, Mr Des Crowley, said the "group transformation programme", aimed at generating €85 million annual savings from April 2003, was ahead of target.
By the end of September, 28 branches had been closed with a reduction in staff of 640. A further seven branch closures are expected - mainly those that overlap in urban areas - with the loss of 1,000 jobs.
