State-owned ICC Bank has reported a 60 per cent rise in pre-tax profits to €46.6 million (£36.7 million) in its final set of results before it becomes part of Bank of Scotland.

Bank of Scotland's £275 million bid for the bank is due to become unconditional next week and will enable the Scottish bank to begin merging the two operations. ICC Bank chief executive, Mr Michael Quinn, said the bank had played a major role in the development of the small-business sector in the Republic which was now reaping great benefits for the economy. "We have made significant strides in our objective to double profits over the next three years and we are very proud to be here and to have succeeded in delivering on the divestment objective of our main shareholder," the Minister for Finance, Mr Quinn said yesterday.

Continued demand for lending, ICC's strength as a provider of venture capital and further cost containment contributed to the strong out-turn. At the end of October 2000, the unrealised venture capital gains increased by €44.9 million to €82.2 million. ICC's venture capital unit invested a record €64.2 million in 30 companies during 2000. The venture capital arm has been run separately from the bank although Bank of Scotland's intentions for it are still unclear. Mr Quinn said he believed the unit had operated very successfully as a discrete unit within ICC and hoped that would continue.

Mr Quinn said the acquisition by Bank of Scotland would present exciting opportunities for the future development of both banks in the Irish market. "We are looking forward to working closely with Bank of Scotland (Ireland) in maximising this potential and we are confident that customers will benefit from the opportunities provided by a strong parent with an international and diversified banking network."

An overseeing integration committee has already been established and led by Bank of Scotland (Ireland)'s chief executive, Mr Mark Duffy, ICC chairman, Mr Phil Flynn and Mr Quinn.

Together, the two banks will employ almost 600 staff, although Bank of Scotland has indicated there may be some voluntary redundancies alongside the creation of new positions. Mr Quinn said ICC was likely to trade under the Bank of Scotland brand.

Mr Duffy will become chief executive of the enlarged group and Mr Flynn will be chairman. Mr Quinn is to step down but will remain as a non-executive director. The 350 employees will receive the equivalent of £117,000 each under the terms of the sale. The takeover will give Bank of Scotland 13 per cent of the small and medium-sized business sector in the Republic.