Anglo Irish Bank, Ireland's third-largest bank, today reported a 17 per cent rise in underlying pre-tax profits to €647 million for the fiscal half ending March 31st.
Net income in, increased to €548 million, or 72 cents a share, compared with €462 million, or 62.9 cents, a year earlier, the Dublin-based bank said in a statement today.
The bank said said first-half earnings rose 19 per cent, helped by loan demand in its home market as well in the UK and US.
"We maintain full-year guidance of 15 per cent earnings per share growth," chairman Sean Fitzpatrick said in the statement.
"However, there continues to be risk to profitability across the banking sector associated with further financial market disruption and the potential impact of a protracted deterioration in the wider economic climate."
The bank said its profit before tax rose 17 per cent to €647 million – excluding a €20 million profit on the disposal of a Swiss private bank.
Lending grew by €6.1 billion, up 10 per cent compared with the same period ending March 31st 2007, brining total customer lending to €69 billion. The bank said it continuous to apply a "highly selective and cautious approach to new lending opportunities". The bank's total assets now stand at €101.4 billion.
Anglo said the rate of impaired loans of 0.52 per cent, valued at €358 million, similar to the 2006 and 2007 levels of 0.52 per cent and 50 per cent respectively.
The bank, which lends to property developers in Ireland, the UK and the US said it would pay an interim dividend of 7.78 cent, an increase of 20 per cent.
Anglo said it has "excellent" liquidity, with treasury assets of €28 billion and added that the six months to the end of March saw customer deposits rise €5.6 million, or up 11 per cent.
It said retail customer balances now stand at €20.7 billion with over 50,000 new customers added in the period.
Loans to Irish customers grew by €3.7 billion to €40.6 billion and the bank said most of its clients are "long established, experienced developers with significant net worth".
However, it said in a reflection of "current market conditions" there were a limited number of smaller relationships that require "more active monitoring.
In an interview chief executive officer David Drumm said the Irish housing market is starting to recover, and that lending will also increase in the US and UK.
In the UK, lending grew by 5 per cent to €20.1 billion and Anglo said its loan book was performing well with client repayment capacity remaining strong on the back of improved income and rental levels.
In the US, Anglo said its net loan growth was €1.4 billion and although “confidence has deteriorated” the bank said it has “no direct exposure to US or other subprime subprime sectors”. Bucking the banking trend, Anglo Irish said it has a strong capital position with its Tier 1 equity ratio, a measure of capital strength, at 8.7 per cent.
The company added that it has written down and sold most of its structured-investment vehicles, leaving it with €3 million euros of SIVs.
Anglo Irish shares have fallen over 13 per cent in Dublin trading over the past six months on concern that the Irish, UK and the US economies are slowing.
Additional reporting Bloomberg