Profit at Merrion Capital soared last year on the back of strong merger and acquisition activity coupled with robust equity markets.

Chief executive John Conroy said yesterday that the stockbroking firm's profits trebled to €24 million in 2006, from €8 million a year earlier.

Profits were boosted by a favourable market environment, Mr Conroy said.

"Also, we had some good deal flow in being involved in the Eircom take-private and also in advising Aer Lingus."

He noted that the "general infrastructure" that Merrion has been building up over the last few years was now paying off.

Merrion was acquired by Icelandic bank Landsbanki for €55.3 million in 2005. "Their timing was good in the sense that Merrion's profits have begun to really take off over the last couple of years."

While 2006 was a good year for the industry generally, Mr Conroy said Merrion fared particularly well.

"We got some specific deals last year that our competitors didn't get, so overall I'd say we outperformed the opposition."

Landsbanki , which is Iceland's third biggest bank, posted a 60 per cent year-on-year rise in fourth-quarter net profit yesterday and said its finances were strong.

The bank, which like its Icelandic peers has been expanding overseas in recent years, reported a fourth-quarter net profit of 14.05 billion Icelandic crowns ($205 million), up from Kr8.8 billion in the same period the previous year and Kr5.74 billion in the third quarter of 2006.

Profit after tax for the full year was Kr40.2 billion, up 61 per cent from Kr25 billion in 2005.

Income from overseas operations for the full year made up 52 per cent of the bank's total revenues, reducing its reliance on volatile domestic markets. It said it had enough liquidity to meet all long-term obligations for the next two years.

The bank's results also showed that its British and Irish operations accounted for roughly one-fifth of total revenue. Mr Conroy said Merrion played a very "large part" in these figures.

Iceland's markets hit turbulence early last year after warnings that its economy was overheating, and some analysts worried that a sharp slowdown would hit the financial sector.

Landsbanki said it expected Iceland's economic growth to slow this year to about 2.5 per cent, but to pick up again to about 5 per cent in 2008 and through 2010.

It said as a result of concerns about the economy in 2006 it had reduced market risk and raised its deposit base and capital ratio. ( Additional reporting - Reuters)