In what is expected to be its last year as a State-owned bank, ICC has produced its strongest results yet with a 31 per cent jump in pre-tax profits to £21.1 million (€26.79 million) for the 12 months to end October 1998. Buoyant economic conditions, a strong focus on customer requirements and "the excellence of our staff" helped the bank record its strongest performance since it was set up in 1933, according to chairman Mr Phil Flynn. Operating profits jumped 28 per cent to £20.7 million. Profits after tax were 34 per cent ahead at £14.8 million (€18.79 million) and the Government is to get a dividend payment of £3.6 million (€4.57 million) for the year, up from £2.5 million (€3.17 million).

All of the bank's divisions exceeded their targets for the period, according to managing director Mr Michael Quinn. In the core banking services business, total loans outstanding to customers rose by 22 per cent to £1.41 billion with net new loans of £257 million during the year. Growth was marginally down on the previous year, when loans increased by 24 per cent, but it was broadly based between factories, tourism, property and services, Mr Quinn said.

Credit quality remained strong, with non-earning assets down to 0.96 per cent of total assets from 1.13 per cent. The bank continued to build a general provision fund, adding £2 million last year to bring the fund to £5.25 million. Its specific provision fund is £12.3 million. The total bad debt charge for the year - general and specific - was £4.5 million, up from £3.8 million. Reflecting growth in loans and deposits, group net interest income was 13 per cent higher at £35.9 million. But net interest margins - the difference between profits from lending and the cost of raising funds - declined in competitive market conditions. The net interest margins shrank to 2 per cent from 2.2 per cent. Non-interest income - mainly fees and commissions and dividend income - was 29 per cent higher at £12.3 million.

Total operating income was up 16.7 per cent to £48.2 million while growth in operating expenses was slower at 9.8 per cent to £27.5 million.

ICC's venture capital division invested £15.5 million in 1998, up 29 per cent on the previous year.