Strong growth in mortgages and deposits have swelled profits at the Bank of Ireland-owned ICS Building Society. The society has achieved a 15.4 per cent increase in pre-tax profits to €56.3 million for 2001 and has reported a strong start to the current year.

Managing director, Mr Joe Larkin, said the society was on track to take its share of the expected 7-8 per cent growth in the mortgage market this year. "Early indicators are for a positive outlook for 2001, with a large amount of new business already written in the first three months of this year. During that period, mortgage applications are up 63 per cent."

In line with other financial institutions, ICS has reported a good increase in the number of investors returning to the residential property market following the changes in tax relief introduced in the last Budget.

Bank of Ireland group, including ICS, is estimated to have 26 per cent of the Irish mortgage market.

ICS's mortgage book grew by 24 per cent to €2 billion during the 12 months. New mortgages advanced during the year were up 16.5 per cent to €607 million. When mortgages repaid are netted off against new ones advanced to ICS customers, lending rose by 21.6 per cent to €399 million.

The society also expanded its deposit base. The total amount of funds on deposit was 23.4 per cent higher at €2.24 billion. It would not disclose the amount of business it had won through the Government-backed Special Savings Incentive Account scheme. Mr Larkin indicated that most of that business was being done by the Bank of Ireland group.

The society booked a higher proportion of profits from fees and commissions earned on sales and processing activities on behalf of its parent. During 2001, the amount of money earned was up 20.6 per cent to €26.8 million.

Income earned on its core savings and lending activities rose by 12.5 per cent to €60.8 million. ICS continued to reduce its cost base with the key cost-to-income ratio dropping from 32.5 per cent to 30.8 per cent.

It has also reported very low bad debts. Arrears on mortgages were fractionally higher at 0.19 per cent of its mortgage book, up from 0.18 per cent in 2000.