Profits at Ulster Bank increased 20 per cent to €569 million last year as the bank added 100,000 new customers to its books.

The performance came as income at the group increased from €1.25 billion to €1.47 billion and customer numbers rose to 1.7 million. Overall lending at the group, which includes both Ulster Bank and First Active, rose 30 per cent to €54.7 billion. Loans to businesses accounted for €29.2 billion of this, jumping 43 per cent on the previous year.

The Ulster Bank group, which is part of the Royal Bank of Scotland group, advanced a total of €22.4 billion to mortgage customers, up 14 per cent on 2005.

This puts it ahead of the market, which had to settle for flat growth in new lending last year, according to recent figures from the Irish Banking Federation (IBF). However, Ulster Bank's 2006 mortgage growth rate is not as high it was in 2005, in which it recorded a 31 per cent increase on 2004.

Customer deposits grew 13 per cent last year to €26.8 billion. Total assets rose 20 per cent to €64.2 billion.

Cormac McCarthy, group chief executive of Ulster Bank, said it had delivered a strong performance in 2006, increasing profit contribution by €100 million, and achieving significant growth in both the Republic and Northern Ireland. Corporate customers increased 7 per cent in the Republic and 4 per cent in Northern Ireland.

A €73 million branch improvement programme was 70 per cent completed and will be fully completed in 2007. Mr McCarthy said the bank would continue to grow its branch network. Ulster Bank recruited 1,300 new staff last year.

The bank opened 80,000 new current accounts in 2006. Mr McCarthy said it had seen "a lot of early interest" in its current offer of a €150 cash incentive for people opening current accounts.

"Really, it is just a statement of intent. We've seen it work in other jurisdictions and we think that it can work here."

The number of mortgage holders who have availed of Ulster Bank's switcher offer exceeded the 6,000 mark in 2006.

Mr McCarthy declined to say if Ulster Bank would bring out a new switcher offer to compete with recent cheaper mortgages launched by National Irish Bank and Halifax. But he said increased competition for switching business was a feature of mature mortgage markets in which overall growth was slowing down.

Average mortgage balances rose by 26 per cent last year, but there was slower growth in the second half of the year. But lending margins, which had fallen slightly in the first half, stabilised as the year progressed.

Royal Bank of Scotland announced strong full-year pre-tax profits of £9.4 billion, up 14 per cent.