Depfa Bank, the Dublin-based lender to governments, reported forecast-beating net profit for the third quarter but said it was halting plans to start providing insurance to guarantee government bonds.
Depfa said third-quarter net profit was €130 million slightly just above profit of €129 million posted in the same quarter last year.
"Depfa is on course to achieve a total net profit above the €500 million mark for fiscal year 2005," it said in a statement today.
Analysts said a drop in profit in its main lending business and higher-than-expected administrative costs were a disappointment but profits were still on track.
Depfa, which lends governments money to back their budgets and pay for infrastructure projects such as hospitals and roads, said it was halting plans to move into the financial guaranty business, where it would insure bonds issued by government authorities such as US states.
Depfa said it would need a triple A rating from credit rating agencies for the insurance business to be viable, but that the agencies had wanted changes to Depfa's business model that the bank was unwilling to accept.
Depfa also reconfirmed that it expected a net profit of 600 million euros next year.