Anglo Irish Bank has reported a strong half-year performance, with pre-tax profits up 56 per cent to £21.5 million. Mr Sean Fitzpatrick, chief executive, said the bank's main activities had all performed ahead of bank projections and that trading continues to be very strong in its key Irish and UK markets this year.

"The strong period of trading looks set to continue, particularly in Ireland, with the new currency regime keeping interest rates low," he said yesterday.

The bank recorded strong growth in lending, with a 21 per cent increase in loans advanced over the six months to £2.5 billion. Over 65 per cent of the bank's lending was in the Irish market, across a broad range of sectors, with the remainder advanced in the UK.

The bank's deposit base also expanded, rising from £2.7 billion at the end of September 1997 to £3.6 billion at the end of last March. Against this growth, the bank's total assets increased to record levels of over £4 billion, up 28 per cent on the previous half year.

Anglo Irish shares traded higher in Dublin yesterday following the announcement, closing at 204p, up 7p on the day. Shareholders will be paid an interim dividend of 1.85p per share, up from 1.65p, while earnings per share rose by 28 per cent to 5.41p.

Commenting on the half year performance, Mr Fitzpatrick said that despite relatively low interest rates, the bank had managed to maintain its net interest margins - the profit on its core borrowing and lending activity - at around 2.9 per cent over the six month period.

The bank's total income rose from £31.8 million to £45 million in the six month period. Its net interest income - the difference between the interest rate charged on loans and the rate paid on deposits - increased from £24.6 million to £35.3 million. Fees and commissions earned on other activities also rose over the six months, up from £6.5 million to £9 million.

Its administrative costs also increased, from £13.1 million to £16 million, largely due to a near 20 per cent rise in staff numbers at the bank. Its cost income ratio continued to decline to 41 per cent.

Mr Fitzpatrick has set aggressive targets for the bank in the future, aiming to double the size of its balance seek over the next five years. He also want wants to achieve a 20 per cent return on shareholders funds. In the interim he said the bank will be sticking to its current strategy, focusing on the middle market in the Irish and UK markets and seeking to diversify its funding base.