Government aims to enact legislation to demutualise the Irish Nationwide Building Society before the Dáil summer recess, clearing the way for the sale of one the last building societies in the Irish market. Arthur Beesley, Senior Business Correspondent

A sale would deliver a cash windfall to about 120,000 qualifying members of Irish Nationwide, which yesterday reported a 30 per cent rise in pretax profits to €176 million for 2005 on the back of the property boom.

Managing director Michael Fingleton said society members would be presented with a single proposal embracing demutualisation and the sale of the society as quickly as possible after the legislation was passed. Such a proposal would first require the approval of the Irish Financial Services Regulatory Authority.

A spokesman for Minister for the Environment Dick Roche, who has political responsibility for mutual societies, said the Government was almost ready to introduce the legislation in the Oireachtas. "It will be published after the Easter, and the Department hopes that the legislation will be enacted before the summer recess of the Dáil," he said.

Mr Fingleton declined to comment on a possible valuation on the society or on possible buyers. However, he suggested that an acquirer could make use of the 50 branches in the society's network to develop a wider retail offering.

"Our preference has always been for a trade sale, to maximise value," he said. Irish Nationwide would appoint corporate finance advisers as soon as the legislation is enacted.

While Mr Fingleton conceded at a briefing for reporters that Irish Nationwide had lost "a little bit" of market share in the mortgage market in 2005, the society's gross lending in the year rose by 51 per cent to €3.59 billion. This brought the value of the society's loan book 36 per cent higher to €7.52 billion. "We're not into market share. We don't have the scale for that," he said. The society's aim was to defend its position and maintain it.

Post-tax profits rose 30 per cent to €139 million, and the society's total assets rose 29 per cent to €10.99 billion. Management costs rose 11 per cent to €33.6 million, but Irish Nationwide said its cost-income ratio of 15.18 per cent "continues to be the lowest of any financial institution in the country and a new low for the society".

Asked about the society's dependence on property lending in Ireland and Britain, Mr Fingleton said that "all the fundamentals continue to be in place" in both markets. He said there was a shortfall of housing supply in Britain and noted that rising demand from east European immigrants was as much a factor there as in the Irish market.

About two-thirds of the society's lending is in the commercial sector - to property developers mainly - and the remainder is to home-loan customers. Mr Fingleton aims to increase the level of commercial lending to 70 per cent of the total.

Its commercial lending is divided equally between the Irish and British markets.