National Irish Bank made an after-tax profit of £4 million (€5 million) in the three months ending December 31st, 1999, the first quarter of the bank's financial year.

Although the results were up on the after-tax profits of £1 million reported in the fourth quarter, profits were unchanged on the same period a year earlier.

"The results represent solid, steady progress for NIB following the restructuring process that took place last year," chief executive Mr Don Price said. "We are confident the pleasing results of this quarter will be sustained through the year."

The bank said its deposits increased by 5.7 per cent on the previous quarter to £1.28 billion while lending was up 4.3 per cent at £1.3 billion. Of this, housing loans rose by 3.2 per cent to £485 million.

NIB also succeeded in slightly widening its net interest margin - the profit from lending less the cost of funds - to 3.26 per cent from 3.2 per cent, while its cost/ income ratio declined to 70 per cent from 76.2 per cent in the previous quarter.

Meanwhile, deep cost-cutting propelled after-tax profit at the group's parent company, National Australia Bank (NAB), up by 6.5 percent to A$771 million (€500 million), near the top end of market forecasts, from A$724 million a year earlier.

On the bank's strategy, the managing director, Mr Frank Cicutto, restated that the bank would expand in Australia, New Zealand, Britain and North America, manage its portfolio to maximise profit growth and actively adopt new technologies. He also repeated that NAB would start buying back shares if it had not found an acquisition opportunity by the middle of the year.

But the comments failed to support the share price and NAB shares closed down 2.2 percent at A$21.79 against an overall market that was marginally higher, loosing nearly all the ground the shares had gained over the past 10 days when it was expected that NAB's result would beat forecasts.