The Irish division of a German bank is set to cut 70 jobs as part of restructuring programme, it emerged yesterday.

Hypo Real Estate Group, which provides finance to the corporate and public sectors and to the propery market, announced yesterday that it is planning to streamline its operations.

The move is likely to lead to 140 redundancies across the group as it will cut job numbers to 1,120 from 1,260.

Around 70 of the jobs will be lost in its Dublin office, which is based in the International Financial Services Centre (IFSC).

The group plans to move its international business, Hypo Real Estate Bank International, from Dublin to Stuttgart. This will account for the bulk of the Irish job losses.

The international division has clients in Europe, the US and Asia.

Hypo said it will continue its capital markets activities from the Dublin office, which will become a subsidiary of the Stuttgart operation, and be renamed Hypo Public Finance Bank.

Its activities will be extended to include public sector finance, lending to public bodies, infrastructure financing and municipal project financing.

It was not clear yesterday if the bank intends looking for opportunities to finance infrastructure projects in the Republic.

The lay-offs and restructuring are expected to be completed by the end of the first half of next year, the bank said in a statement yesterday.

Hypo expects to save €25 million a year from the restructuring, which it expects will cost between €30-€35 million. The bank will provide for this in its 2005 accounts.

The reconstituted Hypo Real Estate International will have a property financing portfolio of €27.2 billion, the bank said yesterday.

Hypo Real Estate released results yesterday showing that in the first six months of the year, the Dublin-based division had net income before tax of €135 million, a 43.6 per cent increase on the same period in 2004.

New business written in the period came to €5.9 billion, of which €3.6 billion was attributable to the second quarter. The bank has a target of €10 billion for new business generated by the international division.

Operating revenues (made up of net interest income, commission income, trading income and income from investments) were €211 million. Hypo pointed out that not all new business generated in the period was interest-bearing.

Overall, the group had net income before taxes of €215 million, an increase of 89 per cent on the same period in 2004, when pretax net income was €114 million.

This excluded a deferred tax charge of €17 million.

The group had earnings per share of €1.19 and total operating revenues of €414 million, a 5.1 per cent increase on last year.

The group's total new business came to €8.3 billion, which it said was ahead of expectations.

Hypo said that the outlook for the second half of 2005 remained strong.