Profits up 62% to €24.3m at Investec Ireland

Investec Ireland has reported a 62 per cent increase in pretax profits to €24.3 million in the six months to September 30th, largely due to growth in its capital markets business and its lending to Irish property developers.

Deposits at the Irish operation of the South African bank, which employs 83 people in Dublin, grew 14 per cent to more than €1 billion in the six-month period.

Profits from its capital market division rose by 70 per cent, while the private banking business recorded a 33 per cent increase in profits. The Irish unit's return on equity was more than 50 per cent, while the bank had a cost-income ratio of 45 per cent.

Michael Cullen, chief executive of Investec Ireland, said its loan book had grown by €75 million to €650 million since the start of the year.

He said the bank had provided finance to Irish developers for projects in the Republic and abroad, in countries such as the UK, Belgium and Portugal, as foreign projects had offered better yields.

Mr Cullen said the bank's Irish operation had no borrowings in the interbank market, which has been hit by the general liquidity freeze.

He said Investec was accepting bids for Start Mortgages, the largest subprime lender in the Irish market.

Start came under Investec's ownership in May through its acquisition of UK financial institution Kensington, a 64 per cent shareholder in Start.

Investec Ireland owns another Irish subprime lender, Nua Homeloans. The bank bought the 40 per cent stake in Nua owned by Finance Ireland last month for €1 million.

Mr Cullen said Nua, which started trading in April, was on target to sell mortgages of between €150 million and €200 million in its first year in operation.

He said the lender had provided mortgages of between €50 million and €100 million, but declined to give an exact figure, and said he expected the business to return profit in its next financial year, to March 31st, 2009.