Ireland

Irish Nationwide profits increase by 30%

Irish Nationwide Building Society has announced a 30% jump in pre-tax profits in its results for the year ending December 2005…

Wed Mar 29 2006 - 01:00

Irish Nationwide Building Society has announced a 30% jump in pre-tax profits in its results for the year ending December 2005.

The group's  €176 million profit was complemented by an increase of 29% in total asset value to almost €11 billion.

Lending increased by 51% to  €3.59 billion, representing a  36%  increase in its total loan book value to €7.6 billion.

In a statement released today, the Society said it believed t he underlying fundamentals of the housing market "remain extremely strong with demand continuing to accelerate in the first quarter of 2006 with the phenomenon of queues of prospective purchasers forming prior to new home launch dates." 

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The Society believes continued immigration into Ireland combined with strong employment growth will underpin demand for residential accommodationwhich it says would "not be unreasonable to expect housing completions in 2006 to be in the region of 80,000 once again ."   

Commenting on today's results,  Managing Director Mr. Michael Fingletonsaid, "The results announced by the Society today reflect once again the exceptional financial strength of the Irish Nationwide particularly in a market that is increasingly competitive and oversupplied and where margins continue to be squeezed on both sides of the balance sheet."

While an increasing proportion of profits are being generated from the commercial side of its business, Mr Fingleton said the Society was maintaining strong growth.
Despite recent interest rate increases, the Society predicts it will only have "a marginal effect" on the demand for houses. It sees the continuing weakness of the European economies as something which will limit the ability of the ECB to raise rates beyond those limits.