Dublin-based financial services group IFG reported better-than-expected first-half operating profits yesterday and said it was unaffected by the current turmoil in the credit markets.

IFG said that GE Money, the US financial services giant that is its partner in the subprime mortgage business, was not affected by the current difficulties in the sector because it did not sell on the loans and held them on its own balance sheet. Chief executive Mark Bourke said the sub-prime mortgage business was performing strongly and had helped to offset a slowdown in mainstream mortgage lending in Ireland. However, he declined to give a figure for subprime lending.

Normal lending, or prime cheque issues fell 13 per cent, to €670 million in the first half, a period that chief executive Marke Bourke described as "tough". He said he sees no let up in the second half. About 20 per cent of the group's overall profit is derived fro the property sector.

The financial services group yesterday recorded a 34 per cent increase in adjusted operating profit, to €11 million in the six months to the end of June.

Revenue was up 20 per cent, at €61.5 million, while adjusted earnings per share increased 48 per cent, to 12.11 cent. Mr Bourke said he remained comfortable with the full-year consensus estimate of adjusted earnings per share of between 19 and 21 cent.

"The group continues to go from strength to strength and we are optimistic that we will continue this performance in the second half," he said.

Analysts welcomed the results, which came in ahead of expectations, although said they would be leaving their forecasts unchanged for the time being in the light of the company's slightly cautious approach.

The shares added 3 per cent, to close at €2.08.