Financial services company IFG has reported a better-than-expected performance in 2003 and has signalled that it will make further progress in reducing its debts this year.

The company, which provides international trustee services, has a mortgage business in Ireland and a pensions business in the UK, reported a 16 per cent drop in profits to €8.1 million last year, compared with €9.6 million in 2002.

The outturn was in line with brokers' expectations.

IFG chief executive Mr Richard Hayes said there had been strong growth in many of its core activities last year while its overall performance was depressed by the costs associated with the regulatory review and restructuring of its pension release business in the UK.

Commenting on the figures, Mr Hayes said he was pleased that the company had achieved its target to reduce its debt by €27 million last year to €86 million and is targeting another €20-25 million fall in 2004.

He said pensions relief business Berkeley Jacobs in the UK remains a "serious problem" for the group. The Financial Services Authority has investigated its sales and compliance procedures and has fined the company £175,000 (€254,000).

The company - which helps people cash in their pensions before retirement - also agreed to carry out a review of the business it conducted over the past two years and Mr Hayes said this could take up to two years to complete.

The company has set aside €2.7 million to provide for any payments it may have to make with these customers.

Berkeley Jacobs ceased trading during that review. The business has now been restructured and a new management team has taken over.

Its UK financial services advisory business reported a 24 per cent increase in profits to €2.02 million after the elimination of loss-making business last year.

In Ireland, its mortgage business recorded an 84 per cent increase in profits to €2.08 million. During last year, the group also announced that it had entered into a joint venture with GE Capital Woodchester to develop non-conforming lending business in Ireland.

The board has recommended a final dividend of 1.57 cent per share which, when added to the interim dividend already paid, makes a total of 2.30 cent, up 4.5 per cent on the previous year.

The dividend is due to be paid on July 23rd, 2004.