Citizens Financial Group, the US bank in which Bank of Ireland has a 23.5 per cent stake, has recorded strong underlying growth in the first quarter to December 31st, 1997. Profit after tax amounted to $46.2 million (£33.7 million) compared with $48.3 million in the comparable period in 1996. This latter figure, however, was inflated by an net gain of $12.8 million ($21 million gross) from the sale of mortgage servicing rights. Excluding this indicates underlying growth of 30 per cent. Mr Paul D'Alton, Bank of Ireland's group chief financial officer, attributes the increase to synergies, acquisitions and organic growth. Synergies arose from the merging of First New Hampshire with Citizens. Citizens has been benefiting from the buoyancy in the US economy. Benefits had also come from the focus on the cost of sales, he added. Citizens has not paid any dividends. The policy, Mr D'Alton said, was to build up capital to fund acquisitions. There were "no immediate plans" to pay dividends. The bank, he said, was pleased with the investment. Citizens was giving a "very good return" and it was "delivering what we expected".

It recorded a profit before tax and exceptional items of $74.8 million compared to $61.2 million. Total assets grew by 11 per cent to $16.8 billion. This, said Citizens, reflected strong asset growth and the acquisitions of Grove Bank in March 1997 and the Bank of New Haven in August 1997. Citizens is based in Providence, Rhode Island and has 274 branches, operating as Citizens Bank in Connecticut, Massachusetts, New Hampshire and Rhode Island. Royal Bank of Scotland is the controlling shareholder with a 76.5 per cent stake.