Financial services group IFG is performing "materially better" this year than it did at the start of 2005, according to a trading update issued yesterday.

The firm said its performance had been strong in the second half of last year, with the buoyancy continuing into the first two months of 2006.

Richard Hayes, IFG chief executive, said the company was "operating on all cylinders" across its three divisions: the Republic, the UK and internationally.

At the start of last year, Mr Hayes told analysts he wanted IFG to double its earnings per share from 10 cent in 2004 to 20 cent in 2007.

"I'd be very confident we'd do that," he said yesterday.

He said the company had recently won new pension scheme administration business in the UK, with its mortgage activities also growing well in the Republic.

IFG also won new contracts in its international division over the first two months, Mr Hayes said.

The company's shares responded well to the update, rising by nine cent to €1.94, despite news that IFG's 2004 decision to exit a loss-making UK pensions business would now cost £1.4 million (€2.03 million) more than expected.

This brings the total cost of exiting the Berkeley Jacobs pensions release operation to about £3.4 million.

Mr Hayes said the company was drawing "a line in the sand" under Berkeley Jacobs.

In 2004, Berkeley Jacobs was fined £175,000 by the British regulator, the financial services authority, for overly-aggressive advertising. At that stage, IFG started to review the subsidiary's activities over the pervious two years.

This review involved 600 cases, and resulted in IFG paying varying amounts of redress to affected customers.

IFG will issue full-year results on April 12th.