Anglo tipped to beat forecast

Stockbrokers increased their full-year earnings forecast for Anglo Irish Bank yesterday after it said that momentum from a strong first half of the year had continued into the second half.

The bank said it anticipated earnings per share would be ahead of the current market consensus of 87 cent by more than 3 cent.

"Lending activity remains buoyant. This performance, combined with the high increase in loan balances in the first half of 2006, provides the bank with an excellent platform for profit growth in 2007," the statement said. "Lending work-in-progress levels continue to be strong and asset quality remains robust."

The bank said its treasury activities continued to deliver high-quality growth in funding and profitability and that its wealth management division was having a strong year.

"All businesses are delivering high-quality growth and we are confident that this momentum will continue into 2007," said Anglo Irish Bank's group chief executive, David Drumm.

Davy Stockbrokers raised its estimate of Anglo Irish Bank's 2006 eps to 91 cent as a result of the pre-close trading statement yesterday. "The message is that rising rates have not really hurt the bank's customer base," Davy analysts Scott Rankin and Emer Lang commented.

Davy's forecast of net new loans of €11.5 billion in 2006 now looks low, with net new loans of €6.6 billion in the first half and all of the bank's regions having a good second half, the broker said.