First Maryland Bancorp, the US subsidiary of AIB, has reported pre-tax profits of $75.4 million (£53.7 million) for the three months to the end of June, a 34 per cent rise on the corresponding quarter in 1997. Profits after tax were 32 per cent ahead at $47.5 million and in line with expectations. The latest results are not directly comparable with the previous year because they include the Dauphin Deposit Bank acquired in July 1997 for £840 million. The second-quarter results include a once-off after-tax gain of $6.3 million on investments. When this gain is excluded, the underlying rise in net earnings was 15 per cent.

In the six months to the end of June, net profits jumped to $143.2 million, from $69.9 million. The latest result includes a once-off after-tax gain of $37.5 million on the sale of First Maryland's consumer credit card business and a gain of $25.5 million on its investment portfolio. When these once-off gains are excluded, there was underlying growth of 15 per cent in first half net profits.

Good growth in some lending sectors and in income from deposit service charges and fees, as well as cost reductions underpinned the latest profits rise.

Commercial lending was 9.8 per cent ahead of December 1997 levels with $3.15 billion in loans outstanding at the end of June. Retail lending was 7.5 per cent stronger at $2.76 billion. But total net lending was just 1.6 per cent ahead at $10.08 billion because of the sale of the credit card operation, lower commercial real estate and residential mortgage lending.

AIB group chief executive, Mr Tom Mulcahy, said the results reflected "the substantial progress achieved in its core retail and commercial banking business. "Highlights of the results included a 6 per cent reduction in second-quarter costs following a 5 per cent reduction in the previous quarter".