Financial services group IFG reported a "solid" set of full-year results for 2006, with sharp growth in sub-prime lending driving its Irish performance
The group, which owns the largest network of mortgage intermediaries in the Republic, said cheque issues in the sub-prime or non-conforming lending business jumped from €94 million in 2005 to €224 million last year.
The market has not been afflicted by the same problems as the more mature US sub-prime market, which has a higher risk profile.
However, the group, which is listed on the Irish Stock Exchange, said its prime or mainstream mortgage business felt the softening of the property market in the second half of 2006. IFG said this had continued into the first quarter of 2007.
Cheque issues in the mainstream mortgage market were €1.55 billion, up from €1.44 billion in 2005.
Chief executive Mark Bourke said 2006 had been a positive year, following a good performance and a restructuring of the company's debt.
"Nothing is off course," he said. "We are well positioned to take advantage of the significant opportunities in each of our core markets."
Any future acquisitions by the company are likely to be made by its international division, Mr Bourke said.
The international division agreed to buy Jersey-based private client company Langtry Trust for a sum of up to €16 million, and it is expected that this business will add to IFG's 2007 performance.
The firm made a severance payment of €1.1 million to former chief executive Richard Hayes, who resigned last March, the results show. Adjusted pretax profits last year were €13.5 million, up from €10.7 million in 2005, while turnover was €107.2 million, up from €92.7 million in the previous year.
There was a light trading in the company's shares on the Irish Stock Exchange yesterday, but the stock managed to add almost 1.5 per cent, closing at a price of €2.09, up three cent on the day.
One51, the waste and infrastructure group involved in a bid for Irish Continental Group, increased its stake in IFG to 8.6 per cent last month.
Davy Stockbrokers described the tone of IFG's statement as positive, despite the note of caution about the property market.
"There is little indication that this business is really struggling," said Davy analyst Scott Rankin.
