Pretax profits at Bank of Scotland's Irish unit grew by 20 per cent to €71 million in the first half of the year, the bank said yesterday.
The bank, which plans to develop a branch network in retail outlets it has acquired from the ESB, said that advances to customers grew by 60 per cent to €14.7 billion in the January-June period.
While the bank's deposits and total assets were also ahead on the same period last year, the bank reported a decline in its net interest margin to 1.8 per cent from 2.06 per cent. The return on equity also declined.
Bank of Scotland (Ireland) concentrates on the business market and on the high-end of the mortgage market.
Its requirement for a deposit of at least 20 per cent of the purchase price of a house means that it does at present not cater for first-time buyers.
However, this is likely to change with the gradual roll-out of new products when it starts opening branches this autumn.
With Danske Bank planning to revamp the National Irish Bank network it has acquired and ACC Bank owner Rabobank now in the market for deposits, the opening of Bank of Scotland's branch networks comes at a time of increasing competition to the established banks in the Irish market. Bank of Scotland (Ireland) chief executive Mark Duffy said that all areas of its banking activity contributed to increases in advances and deposits.
"The outlook for the remainder of 2005 is very positive, with a strong pipeline of business and economic factors continuing to support robust growth in our chosen markets."
The bank said the total assets in the Irish unit had increased 58 per cent to €19.4 billion, while total customer deposits were up 30 per cent at €6.9 billion.
Shareholders' funds grew to €744 million from €588 million while a 43 per cent cost income ratio in the first six months was up from 40 per cent in the same period last year.
The 19 per cent return on equity in the first half was down from 22 per cent in 2004.
The figures for the Irish unit were published as HBOS reported a 15 per cent rise in its first-half profit to £2.26 billion (€3.26 billion) from £1.97 billion a year earlier as revenue growth outstripped cost increases.
