Strong growth in corporate and retail banking and international lending made for record earnings at Irish Intercontinental Bank (IIB) last year. The bank, which is 75 per cent owned by the Belgian Kredietbank group, has reported a 15 per cent rise in after- tax profits to £23 million (€29 million) and is confident of another strong out-turn in 1999.
Meanwhile, IIB chairman Mr Paddy McEvoy reaffirmed the bank's interest in purchasing the State-owned ICC Bank and stated that negotiations were in progress which could lead to an end of the business relationship between its parent and Irish Life.
Irish Life has a 25 per cent stake in IIB while IIB, in turn, owns 66.6 per cent of Irish Life's home-loans subsidiary, Irish Life Finance. Both groups also have a stake in K&H bank in Hungary.
The negotiations were prompted by Irish Life's decision to merge with Irish Permanent.
Mr McEvoy said both companies had enjoyed a fruitful relationship but that a conflict had arisen in the mortgage market because of the merger. Both sides are understood to be close to completing a deal which could also include Kredietbank buying Irish Life's 24 per cent stake in K&H. IIB is also keenly focused on adding ICC Bank to its Irish operations. The bank, which is being sold by the Government, is a key player in the small and medium-size business sector and will attract strong interest. IIB has appointed JP Morgan as its financial advisers on the acquisition, with the Government expected to invite interested parties to submit tenders for the bank in May.
ICC would give IIB exposure to the small and medium-sized business market for the first time and would also bring a venture capital arm to its activities.
During the year IIB's total assets grew to £4 billion (€5.1 billion). Its deposit base expanded by 23 per cent to £3.8 billion. Loan advances showed identical growth, rising to £2.6 billion. The bank, which is not a public company, does not disclose profit figures for its subsidiaries although it stated that the Irish Life home-loans business has contributed around 29 per cent to group profits before costs last year. It claims to have close to 10 per cent of all new mortgage lending. New residential mortgage lending increased to £260 million in the 12-month period.
Internationally, its IFSC-based subsidiary also enjoyed a good year. It arranges finance for aircraft, shipping and other projects. Looking forward, chief executive Mr Ted Marah said continuing low interest rates and inflation should underpin further growth at its Irish operations. IIB will also continue to work closely with its parent, which is Belgium's largest financial institution, to develop new products and distribution channels, he said.
