Pretax profits at Irish Nationwide climbed by 16 per cent in 2004 as lending and customer deposits significantly increased. Chief executive Michael Fingleton said strong growth was experienced across all areas of activity. He said the building society was now one of the most profitable institutions in Ireland or Britain.

Pretax profits rose from €117 million to €135 million. Stripping out exceptional income, the increase in pretax profits was 35 per cent, said the society. Total assets increased by a record 44 per cent to €8.5 billion.

The society's after tax profits were up by 12 per cent, from €96 million to €107 million. Mr Fingleton drew particular attention to the increase in gross lending, which rose to €2.3 billion, from €1.7 billion in the previous year.

This represents an increase of 33 per cent. The Irish Nationwide loan book now stands at €5.5 billion, an increase of 31 per cent on the previous year. Mr Fingleton said the increase in customer account numbers (including share and deposit accounts) was "impressive", rising by 38 per cent to €4.7 billion.

He said the cost/income ratio at the society now stood at 20.24 per cent and he claimed this was the lowest of any financial institution in the country and a new low for the society.

Mr Fingleton said the society performed well last year, despite strong competition in the financial services sector and further erosion of margins in all sectors of the market.

"The underlying quality of the society's mortgage book is positive and is underpinned by low interest rates and increasing property values. It is a reflection of the quality of the book that we re-possessed only one property in 2001 and two properties in each of the years 2002, 2003 and 2004," he said.

He said the decision in 2004 to launch a new savings/investment product, called the Freedom Account, had led to a strong growth in the society's shares and deposit base. "The average savings rates offered by the society over the past 30 years have always been among the highest, if not the highest, offered on the savings market," he said.

Mr Fingleton strongly rejected suggestions the property market was about to suffer a significant setback. He said 2004 saw a record number of houses being built and demand was continuing. "We expect in excess of 70,000 units to be built in 2005," he said.

Mr Fingleton said the society had never closed a branch, never needed to offer redundancy and had increased the number of employees every year.

Asked would a buyer have to give a guarantee that no Irish Nationwide branch would be closed in future, he replied that staff would be "very well protected" in any future arrangement.