Profits rose 32 per cent to €47.5 million (£36 million) last year at IIB Bank, which has reported a strong start to 2001. The bank, which is owned by the Belgian KBC Bank group, has shown good growth across all areas and is optimistic that, despite some inevitable slowdown in the pace of economic growth in the Republic, it can put in a strong performance in the current year.

Chairman Mr Paddy McEvoy said the bank anticipated that precautions taken to minimise the outbreak of foot-and-mouth will have some effect on the economy in the short term. IIB chief executive Mr Ted Marah said the bank had reviewed its loan book but was not concerned about any increased risk. The bank lends across a range of sectors including property, small business and mortgages.

Some 37 per cent (€17.5 million) of last year's profits came from its banking business. Treasury operations accounted for 18 per cent (€8.6 million), its IIB Homeloans business contributed 21 per cent (€9.9 million) and private banking and investment activities added 24 per cent (€11.5 million).

Shareholder funds increased by 20 per cent to €265 million last year. Deposits rose by 19 per cent to €7.5 billion while total assets expanded by 19 per cent to €7.9 billion.

The bank estimates IIB Homeloans has over 10 per cent of the Irish residential mortgage market, with new loans of almost €900 million advanced during the 12-month period. The bank reported good progress at its private banking business, set up 18 months ago. It has its own high net worth client base which, together with its business customers, is expanding.