GOOD growth in all business areas and strong cost controls produced a 9 per cent rise in pretax profits at Bank of Ireland to £395.6 million for the year to the end of March. The latest results contained no surprises and were in line with market expectations.

Chief executive, Mr Pat Molloy said he was happy with the results, adding that profits had almost reached "the magic £400 million figure". That level was not reached because the bank was now paying tax on its US profits, raising its effective tax rate from 28 per cent to 33 per cent. With the higher tax rate, earnings per share rose by only 1 per cent to 52p.

Shareholders will receive a final dividend of 11.65p per share, bringing the total dividend for the year to 17.75p, an increase of 16.4 per cent.

Total income grew by 7.8 per cent to £923.3 million, swelled by strong lending, growth in fee income and good contributions from group businesses including Lifetime Assurance, Bank of Ireland Asset Management and Davy Stockbrokers.

Net interest income was 5.6 per cent stronger at £608.1 million, an increase of £32.4 million. Increases in lending and deposits, and interest earned on surplus capital enhanced income by £64 million. But the overall increase was reduced to £32.4 million because of a shift in deposits from lowcost demand accounts towards higher cost time accounts. This produced pressure on net interest margins - the profit on lending and raising funds - which fell to 3.66 per cent from 3.85 per cent.

Overall group lending was about 14 per cent higher when First New Hampshire's loans were stripped out - Bank of Ireland merged its US business with Citizens Financial Group, taking 23.5 per cent of the enlarged entity, so these loans are no longer included.

Group mortgage lending rose by 9 per cent to £4.9 billion. In Ireland mortgage lending was 12.2 per cent higher to £236 million while in Britain the rise was only 1.3 per cent to £35 million sterling.

Other group personal lending rose by 15 per cent to £1.5 billion, with a 14 per cent rise in Ireland to £630 million and a 15.8 per cent rise in Britain to £178 million sterling. Agricultural lending was flat at £600 million while commercial lending rose by 20 per cent to £4.8 billion. At year end the group has £11.8 billion in outstanding loans.

Non interest income was 12.3 per cent higher at £315.2 million, aided by strong growth at the funds management business in Ireland and the US, good revenue growth at Lifetime and at Davy stockbrokers and growth in fee income from the bank's credit card and foreign exchange operations. Non interest income contributed 34 per cent of total income.

Costs were kept well under control, increasing only 4.4 per cent to £543 million, despite growth in business volumes and a 18 per cent rise in the depreciation charge to £45.4 million. Staff numbers were lower at the year end - down 320 to 10.484. The cost/income ratio fell to 59 per cent from 61 per cent.

At £20 million, the loan/loss provision was down £1.4 million at 0. 18 per cent of average loans. In healthy economies asset quality was good, with only £235 million under provision.

Total assets at the year end were £19.7 billion, up 6.8 per cent, when First New Hampshire assets of £2.5 billion are excluded. The return on assets was unchanged at 1.3 per cent while the return on equity slipped to 21.7 per cent from 24.9 per cent due to the buildup of capital for the Bristol & West acquisition.

Ireland provided 81 per cent of group profits, but the figure includes profits generated by operations at the International Financial Services Centre. When these are reallocated, 31 per cent of group profits came from outside Ireland. The US contributed profits of £35.5 million while Britain generated £26.8 million.

The retail division - branches in Ireland, Britain and Northern Ireland - generated 51 per cent of group profits, with a 12 per cent increase to £204.4 million.

Profits at the corporate and treasury division eased from £75 million to £73.9 million due to lower recoveries of amounts previously written off and tighter margins. Other group activities, mainly subsidiaries and interest on surplus capital (about £10 million), contributed £90.3 million, up from £66.2 million.