BOOSTED by growth in lending and tight cost control, pre-tax profits at the EBS building society rose 10 per cent to £23 million for 1995.

Reporting an 18 per cent rise in lending, EBS advanced net new loans of £151 million during the year after repayments are taken into account. New lending for home and other purposes, before repayments, was £237 million. Total lending was £1.298 billion at the end of 1995, with 90 per cent of loans advanced for residential mortgages.

EBS claimed an increase in its share of the total net residential mortgage market to 10.5 per cent from 10.2 per cent and to have taken 25.7 per cent (1994 22.1 per cent) of net residential lending by building societies and Irish Permanent.

Pre-tax profits at EBS increased by £2.1 million to £23 million. Income rose by £2.8 million while costs increased by £700,000.

Total income increased 5.6 per cent to £53.1 million while operating costs were only 2.4 per cent higher at £29.7 million.

Income was boosted by growth in the volume of lending which helped to offset pressure on margins in intensely competitive mortgage markets.

The £2.8 million increase in total income was made up of an extra £3 million in interest from core lending and a £700,000 rise in commission and fee income, less a fall of £1 million in interest and dividend income from Government bonds and the investment of free reserves.

Overall, net interest income increased by £300,000 to £48.7 million while net income from fees and commissions was £700,000 higher at £4 million.

A breakdown of net interest income shows interest income was £14.6 million higher at £121 million, including interest from gilts of £9.3 million (1994 £8.5 million) while interest paid for funds deposits and funds raised in the market increased by £14.3 million to £72.3 million.

Customer deposits increased by 10 per cent or £127 million to £1.387 billion.

The pressure on net interest income in competitive mortgage and savings markets is evident from the fall in the society's funding/lending margin. This margin, which shows interest earned from lending (other interest income is not included) less the cost of funds, fell to 2.99 per cent from 3.11 per cent.

Cost control and income growth resulted in an improvement in the society's cost/income ratio to 55.9 per cent from 57.7 per cent and its cost/asset ratio improved to 1.78 per cent from 1.97 per cent.

After tax at an effective rate of 38 per cent, the EBS surplus for the year rose by 5.9 per cent to £14.3 million, bringing year end reserves to £132.4 million.

At the end of 1995, the society had total assets of £1.764 billion.