National Irish Bank (NIB) has reported pretax profits of €21 million for the first nine months of the year, as mortgage lending at the bank continues to soar ahead of the market average.
Total income at the group is up 32 per cent at €143 million, with net interest income increasing 33 per cent to €117 million.
Overall lending by the bank increased 43 per cent to €9 billion, with mortgage lending up 45 per cent on the first nine months of last year and business loans 44 per cent higher.
The bank has issued more than €2 billion in approvals for its loan-to-value (LTV) mortgage since its launch last October.
Underlying profits - profits before the cost of integrating the bank with its Danish parent Danske Bank and other expenses are taken into account - were up 115 per cent at €56 million.
The figures reflect a convincing return to profit, after the €4 million loss recorded in the first nine months of 2006, when NIB moved to Danske Bank's technology platform.
Full-year pretax profits at the bank are likely to be significantly higher in 2007 than the €3.5 million recorded last year, as the bank has kept its operating expenses down while securing strong growth in income.
The bank said its operating expenses had increased by just 6 per cent during a period of significant investment in its distribution franchise. Its cost-income ratio has fallen sharply as a result, from 76 per cent in September 2006 to 61 per cent in September 2007.
Non-interest income has gone up 33 per cent due to the sale of wealth management products such as the bank's online share trading facility and cash management services aimed at business customers.
The bank has won a number of high-profile business customers this year and successfully tendered for the Department of Finance's cash management business in the third quarter.
Customer deposits have increased 18 per cent year-on-year, the bank said.
NIB chief executive Andrew Healy said eight increases in European Central Bank (ECB) interest rates had prompted homeowners to consider the cost of their existing mortgage, with the result that the bank had attracted a high number of mortgage switchers to its books.
Its LTV mortgage offers lower interest rates to homeowners whose loans are less than 80 per cent of their property's value.
The bank said its branch expansion programme was progressing well, with branches due to open in Dublin's South Docks, Galway and Ballincollig, Co Cork, in the next few weeks. The bank plans to open 15 branches in the next two years.
NIB owners Danske Bank reported net profits of 11.3 billion kroner (€1.5 billion) for the first nine months of the year, which it said was in line with expectations despite the recent turbulence in financial markets.
Third-quarter profits fell 15 per cent, but this was ahead of expectations.
Danske Bank chief executive Peter Straarup noted the geographic diversification of the group's activities and the increasing profitability of its international banking operations. The group operates in Finland, Sweden, Norway, the Baltic states and Russia as well as the Republic through NIB and in the North through Northern Bank.
Danske Bank said the underlying credit quality of back-up liquidity facilities provided to international investment companies was high.
