Anglo Irish Bank has announced a 28 per cent increase in half-year pre-tax profits to €34.9 million (£27.5 million) with all of the bank's operations contributing to the record profits.

Loan growth remained buoyant but there was also strong growth in fee income from capital markets operations.

Overall lending rose by 30 per cent to €4.56 billion in the six months to the end of March, with Ireland accounting for 68 per cent of all loans, and Britain for the balance. At the same time, deposits rose by 12 per cent to €5.57 billion. Anglo said it maintained its lending margins at 2.9 per cent and expected this to continue. In addition to interest income of €60.1 million, the bank reported a 64 per cent increase in its fee income to €18.7 million.

Administrative expenses rose by 48 per cent to €30.1 million, partly reflecting the integration costs involved in the acquisition of Smurfit Paribas and Credit Lyonnais' private banking operations in Austria.

There was also a sizeable increase in the bank's bad debt charge, up 77 per cent at €14.7 million. This reflected the big increase in loan volumes rather than worries about a downturn, the chief executive, Mr Sean Fitzpatrick, said.

However, the bank's overall cost/income ratio remained steady at 41 per cent.

Mr Fitzpatrick said Anglo's growth strategy remained unchanged and it would continue to focus on growing its core business while seeking appropriate acquisitions. "We are a very focused bank with a franchise in the business market and that's where we're going to remain."

He said the bank would continue to target the Irish and British market for its lending business but was looking to diversify its deposit resources right across Europe but it is only interested in acquisitions that will be earnings enhancing within 12 months.

Anglo is currently at the very early stages of looking at one or two acquisition possibilities, including a small loan book in Britain.

Mr Fitzpatrick said the bank was also likely to open a small, representative office in the US, probably by the end of the year, to get involved in areas like corporate foreign exchange or trade finance.

Regarding ICC Bank, Mr Fitzpatrick said no hard copy or memoranda had yet been issued about its sale and Anglo still did not know what conditions would apply. However, at the end of the day, it would come down to price.

Earnings per share (EPS) rose by 33 per cent to 9.15 cents (7.21 pence). The bank has already paid an interim dividend of 2.1p per share to allow shareholders to take advantage of the more favourable tax regime applying before Budget changes were introduced in April.