State-owned ICC Bank has recorded a strong 24 per cent rise in pre-tax profits to £16.1 million for the year to the end of October, 1997, and paid a dividend of £2.52 million to the Government. Chairman Mr Phil Flynn described the past year as the most profitable since the bank was set up in 1933. "I am extremely optimistic about the future", he said. All of ICC's business divisions exceeded their targets helped by a buoyant economy, a sharp focus on customers needs and the "tremendous efforts" of staff.

Good growth in lending, profits on the sale of venture capital investments, a strong treasury performance and lower bad debt provisions boosted the latest results. With net new loans of £224 million, lending rose by 24 per cent bringing total lending at year-end of £1,151 million. Demand was strong from all sectors, but tourism and property showed greater than average growth, according to managing director Mr Michael Quinn.

Among its divisions ICC venture capital business performed well, Mr Quinn said. Profits of about £2 million were made on the sale of investments, while there were unrealised gains of £8.3 million for the year. Some £12 million was invested in companies ranging from McInerney Holdings to Lets Talk Phones, Whelan Quarries and Potato Cuisine. At year end the investments were valued at £35 million, including the unrealised gains, bringing total unrealised gains from equity investments in the fund to £18.6 million. The £20 million ICC Venture Capital Fund set up with the Irish Pension Funds has made 14 investments and will be fully invested by the middle of the year, Mr Quinn said. The £10 million software development fund has committed funding to six projects and "deal flow is quite encouraging", he said.

The treasury division produced strong results, though performance figures are not disclosed. Net income from foreign exchange increased by 27 per cent, while net income from fixed interest products was 57 per cent higher.

The BES section raised £8.3 million and after repayments had £40 million under management at year end. However, the Budget reduction in the aggregate amount a company can raise from £1 million to £250,000 will significantly reduce the availability of BES to medium sized companies, Mr Quinn said. ICC is examining what future role it can play as a manager of BES funds in the changed environment, he said.

Group results show a 15 per cent rise in interest income to £100.4 million. Interest paid out for funds was 19 per cent ahead at £73.6 million. Net interest income rose by 6.2 per cent to £31.8 million, with growth held back by the drop in interest margins - profits on lending less the cost of funds - to 2.22 per cent from 2.41 per cent.

Non interest income was 10.7 per cent higher at £9.7 million helped by the £2 million profits on the sale of investments and strong foreign exchange income. Total operating income was 7.2 per cent ahead at £41.5 million.

On the costs side, bad debt provisions were down 17 per cent to £3.8 million, despite an increased general provision change - £1.5 million from £1 million. Nonearning assets fell from 2.1 per cent of total assets to a historically low level of 1.3 per cent. Provisions covered 84 per cent of nonearning loans against 55 per cent in the previous year. Asset quality is continually monitored, Mr Quinn stressed.

Administrative expenses rose by six per cent to £19.7 million and included costs of preparation for EMU of about £0.5 million. ICC's cost income ratio was unchanged at 50.1 per cent.

At £11 million profits after tax were up from £7.1 million but the previous year figure included an exceptional reorganisation cost of £4 million. Earnings per share were up 56 per cent to 91.9p with a final dividend of 15p per share. Total assets at ICC rose by 20 per cent to £1.6 billion with the pre-tax return on shareholders funds of 18.4 per cent, up from 17 per cent.