Strong growth in mortgage lending helped pre-tax profits at ICS Building Society rise last year by 8.7 per cent to £33.5 million (€42.6 million) from £30.86 million in 1997.
There was a 27.6 per cent increase in new mortgages in 1998 from £196 million to £250 million as the property market remained buoyant. Net mortgage lending rose 21 per cent to £122 million from £101 million the year before.
However, the building society's 6.5 per cent share of the new mortgage market was the same as the previous year.
ICS is owned by Bank of Ireland and, in 1998, processed "record" volumes of Bank of Ireland group mortgages through its mortgage service centre. This helped non-fund based income grow by 28.6 per cent to £7.2 million.
Deposits increased to £1.4 billion from £1.3 billion the year before. The society said the increase in deposits was particularly welcome considering the "extremely competitive market" in the Republic and the "low interest rate environment".
Net interest income increased by 12 per cent to £44 million from £39.3 million, although net interest margins dropped from 2.88 per cent to 2.77 per cent.
One factor reducing profits was the 13.9 per cent increase in operating expenses to £13.8 million from £10.8 million. The development of its Mortgage Store network accounted for 5.1 per cent of this increase, with the rest made up by increased volumes of business.
The cost to income ratio rose from 28.7 per cent to 31.7 per cent, although the building society said that when a £1.5 million once-off cost for Year 2000 compliance was taken out the ratio was constant.
Managing director, Mr Ted McGovern said 1998 had been a year of strong mortgage growth as interest rates dropped to their lowest level since the early 1960s. He predicted that 1999 would be another record year for new mortgages. He said the society intended to further develop its Mortgage Store network - it currently has seven stores around the State.
He said ICS considered 1998 a successful year as it had grown its mortgage book and deposit base at the same time.
