Financial services group Friends First has reported record profit of €20 million for 2003, up 43 per cent on the previous year.

The growth came despite a 13 per cent decline in life assurance sales, which came in at €79.8 million on the standard annual premium equivalent measure.

The company said this represented an "impressive" performance in a volatile market, with Friends First managing to raise its share of life sales from 6.3 per cent to 7.1 per cent over the year.

The market as a whole saw life sales fall back by 23 per cent.

Group chief executive Mr Adrian Heraty said Friends First had anticipated challenges across all of its business lines and had implemented plans to compensate for market weaknesses.

"We performed strongly in a very difficult climate and we are confident that, in an improved economic climate in the year ahead, we will continue to grow our business," Mr Heraty said.

A breakdown of the life results showed that regular premium pension sales increased by 42 per cent to €39.7 million last year, with the growth attributable largely to executive and group schemes. Regular premium life sales were considerably less impressive, however, with sales of €13.1 million marking a 54 per cent decline on 2002. Savings products were blamed for most of the decline.

Friends First pointed to single premium sales, which fell 22 per cent to €262.5 million, as an area "directly affected by the uncertainty in the equity markets".

The launch of tracker bonds and other products had helped to compensate for the fall-off in with-profit sales.

Friends First's finance arm wrote €206 million in new lending business last year, up 12 per cent on 2002. Motor dealer lending, consumer lending and corporate lending all met profit targets, according to the firm.