ICC Bank, the state-controlled banking and venture capital group, has recorded strong growth with a 20.4 per cent rise in pre-tax profit from £5.8 million to £7.05 million in the six months to April 30th, 1997. This upward surge is continuing and ICC is looking for the healthy trend to remain for the rest of the year, despite continued strong competitive pressures.

Recent legislation allows the group to increase its authorised share capital and borrowing powers. ICC managing director, Mr Michael Quinn, said the group would need an equity injection of some £50 million over the next two to three years. "We will be negotiating with the new government and will be making a strong business case" for the injection.

The bank, he added, did "pay a handsome dividend" and new equity funds would be required if the "capital is to be remunerated in a positive way". Despite the strong profit growth in the first half, ICC has declared an unchanged 6p interim dividend, costing £719,000, which goes to the State. Mr Quinn said that, when ICC was declaring a dividend, it looked at the requirements of the company and he argued that dividends can be made at the expense of capital which we need".

ICC continues to be interested in forming a strategic partnership, with a preference for a foreign-based bank, to support future growth. Mr Quinn noted that "looking at the future and at (ICC's) capital needs, this is one of the options". The question of ownership" he conceded, would crop up with the new Government.

The latest results reflect the substantial expansion of the small- and medium-sized enterprise sector. ICC experienced strong demand from this sector said Mr Quinn. Its market share remained unchanged.

The group's total income increased by 10.4 per cent from £48.4 million to £53.5 million in "highly competitive market conditions the interim statement said.

Operating income grew by 10 per cent from £17.7 million to £19.5 million. This reflected a 7.8 per cent rise in net interest income from £14.3 million to £15.4 million. Other income, reflecting realisations in the bank's venture capital portfolio, rose from £3.4 million to £4.1 million.

Administrative costs went ahead by 5 per cent. These, however, were inflated by extra costs associated with computer costs in the run-up to 2000 and preparations for the single currency. Nevertheless, the cost income ratio improved from 54.7 per cent to 52.5 per cent. The target, said Mr Quinn, was to bring this below 50 per cent. It should be down to 47 per cent in about a year's time".

Reflecting a strong expansion in its core banking business, advances grew by 19 per cent from £834 million to £995 million in the first six months. These have since gone above £1 billion which marked a celebration with the customer who pushed it up to that record figure, Mr Quinn said.

Margins "continued to be tight in all markets" ICC said, but specific provisions for bad and; doubtful debts "decreased further".