Irish Life & Permanent reported a 33 per cent rise in operating profits to €321 million in the first six months of the year, despite a 19 per cent drop in new mortgage lending.
The company said the rise was secured on the back of strong performances in both the life and pensions business and in the banking business of Permanent TSB.
"Not surprisingly, life and pensions proved the star performer," said Davy's Emer Lang in a note to investors.
"Profits here were up 45 per cent, beating our expectations by almost 8 per cent."
Life and investment sales,which included sales in retail, corporate business and Irish Life Investment Managers, rose by 66 per cent to €594 million. Operating profits in the life and pensions business stood at €194 million for the first six months, up from €134 million.
New inflows into the ILIM investment management business were up by 124 per cent at €2.4 billion.
The company now has a 30 per cent share of the life and pensions market and group chief executive Denis Casey said the "extraordinary blossoming" of the long-term savings market has been a key driver for the business. The company recently set up a new wealth management unit to win a growing share of what it terms the "mass affluent" market.
Operating profits at its Permanent TSB banking arm rose by 23 per cent to €111 million.
The value of the Permanent TSB loan book rose by 23 per cent during the half year, with a strong performance by the bank in the retention of existing mortgages and very strong growth in new mortgage lending in the UK, which it said more than compensated for the expected cooling in new mortgage lending in the Republic.
Irish Life & Permanent's UK mortgage business grew by 64 per cent over the first half of the year and it expects it will lend more than €3 billion in the UK this year.
In the Republic, the value of the bank's loan book rose 21 per cent in value, despite a reduction in new mortgage lending of nearly 20 per cent compared to the same period last year.
Mr Casey said too much attention had been focused on the housing market over the past six months, which had led to commentators and analysts to under-estimate the strength and resilience of the rest of the economy.
Permanent TSB added 35,000 new customers in the first six months of the year and it said it would have close to half a million current account holders by the year end.
"This year we will attract over 60,000 new customers to the bank," said Mr Casey.
Mr Casey said he was confident on the outlook for the rest of the year. Growth in operating profit from the group's core life and banking operations exceed 20 per cent for the year, he said. The group will pay an interim dividend of 22.5 cent per share.
