First-quarter profits at Depfa Bank, the Dublin-based but Frankfurt-listed financial group, fell as the company sought to reduce its reliance on global markets and become more client-focused, its accounts showed yesterday.

Speaking after the results were released, deputy chief executive Matthias Mosler, said gains in Depfa's infrastructure financing business had failed to offset the effect that a change in the interest rate environment had on the global markets division. He said the company had spent money closing off unprofitable positions and was now in the process of switching to a less risky, more focused investment strategy. This year Depfa expects its global markets division to account for just 10 per cent of total revenue, down from 50 per cent in 2005.

On the infrastructure side, where Depfa provides financing for projects such as Dublin's new national conference centre, business is looking much more healthy, according to Mr Mosler.

During the first quarter alone Depfa closed 27 deals, compared with 60 in the whole of 2006. Mr Mosler said the group had more than 300 potential deals in the pipeline, including several high-profile Irish projects.

Group net profit for the first three months of 2007 was €123 million, down 8 per cent on the same period last year. Net interest income was €101 million, with a 3 per cent increase from the lending business in budget finance offsetting negative growth in global markets activity.

Pretax profit from the group's budget finance, infrastructure finance and client product services divisions increased 12 per cent to €173 million, while global markets saw its profit drop 88 per cent to €5 million.

Mr Mosler said the infrastructure business had great potential for the group as governments come under increasing pressure to raise funds to improve facilities. "Infrastructure needs are huge and there is great pressure on the public sector," he said.

Total expenditure increased by 16 per cent to €67 million as the group hired new staff.