Bank of Scotland (Ireland) has recorded a 45 per cent jump in pretax profits to €213 million last year, despite the significant investment required to build up its retail banking division.

The bank, which is part of the UK-based HBOS group, rolled out 24 new branches last year and rebranded its retail business as Halifax last November. "Against the substantial backdrop of establishing a new retail bank, this is a very strong performance with record profits generated across the business," chief executive Mark Duffy said yesterday.

Lending growth was particularly strong last year, rising by 33 per cent to €23.6 billion. Business banking grew to €16.8 billion and accounted for more than 70 per cent of the bank's loan book by the end of the year.

Net interest income reached €394 million last year, up from €297 million in 2005, reflecting the marked growth in lending. However, there was a slight drop in the bank's net interest margin from 1.77 per cent in 2005 to 1.73 per cent, which was attributed to a change in product mix.

Customer deposits grew by 36 per cent to €8.7 billion. Mr Duffy said that the bank succeeded in attracting more than 44,000 new retail customers during the year.

"The name of the game for us is customer acquisition," he said.

Competition was beginning to break down customer inertia, he continued. Bank of Scotland (Ireland) succeeded in gaining significant market share last year, capturing 8 per cent of new net lending in the mortgage market.

Mr Duffy also said that Joe Higgins was leaving his position as finance director to take up the role of head of mortgages in HBOS. Bank of Scotland (Ireland)'s current head of finance Tom Fitzgerald has been named as his successor.