Bank of Scotland Ireland made pre-tax profits of €118 million in the first half of 2007, an increase of 14 per cent on last year.
The bank said it was beating the market on mortgage volumes, which were flat while the overall market declined. It said there were signs of renewed activity in the mortgage market, which it believes will increase during the second half of the year.
The bank's pipeline of mortgage applications is up 12 per cent on December 2006 and it expects to increase its market share for the second year in a row.
Loans to customers were 23 per cent higher than in the first six months of 2006.
The bank, which has a 32-strong branch network in the Republic under the name of Halifax, advanced a total of €26.3 billion in the first half of this year.
Its business banking division accounted for €18.7 billion of this, with retail customers borrowing €7.6 billion. Customer deposits were up 10 per cent on an annual basis, climbing to €9 billion.
The bank said the Halifax current account, which was launched in May, was performing "ahead of expectations" and that it was on track to open more branches by the end of the year.
Chief executive Mark Duffy said Halifax was now a full-service bank competing head-on with the "big two" banks, AIB and Bank of Ireland.
"While it is still early days, initial signs for the business are encouraging, and we believe we are well positioned to benefit from the opportunities in the Irish market," the bank said in a statement.
Operating expenses increased 24 per cent to €108 million, as the bank opened seven branches and established business banking centres in Kilkenny, Wexford and Drogheda.
Net operating income increased 16 per cent to €242 million, with an investment disposal in the first half of 2006 reducing the pre-tax growth rate.
Net interest income at the bank increased 23 per cent over the 12 months to €224 million, but the net interest margin fell slightly from 1.7 per cent to 1.67 per cent.
The bank said the increase in net interest income reflected strong growth in advances, but that this was hampered by the decline in the margin.
Intensifying competition in the mortgage market led to a decline in mortgage margins, but the bank has increased its share of gross lending from 7.4 per cent to 7.7 per cent.
