National Irish Bank has reported a sharp increase in profits in the six months to the end of March last, with pretax figures up 44 per cent to £16 million. The profits relate to the half-year trading period which ended days after the bank was forced to publicly admit it had improperly taken money from some customers' accounts. The admission was made following allegations of interest loading on certain customer's accounts over a number of years. The interim results show the bank achieved strong growth in income earned on its personal and business lending and had also expanded its deposit base.

Net interest income - the difference between the rate of interest charged on loans and the rate paid to depositors - rose by 12.2 per cent to £27 million. In addition, the bank also recorded a 25 per cent increase in other income, to £12.6 million.

Total bank lending was strong, with lending to customers up 17.9 per cent to £1.2 billion. NIB chief operating officer, Mr Philip Halpin, said the growth in lending was broadly based, with business lending up 27 per cent, personal loans up 14 per cent and mortgage lending ahead by 19 per cent.

NIB reported a rise in deposits, up 8.7 per cent to £1.2 billion. Total bank assets grew by 24 per cent to £1.7 billion over the six months.

In line with lower interest rates, the bank's net interest margin - the profit on its core borrowing and lending activities - fell slightly, dropping from 3.7 per cent to 3.6 per cent, but remain relatively high by industry standards.

The bank's costs also fell, with its cost/income ratio dropping from 65 per cent to 58.9 per cent. Commenting on the half-year performance yesterday, NIB chief executive, Mr Grahame Savage, said the bank was pleased with its strong trading performance. "The bank continues to perform well, in the face of the difficulties which we have encountered recently and has not been deflected from its development programme which is being actively pursued."

NIB's parent, National Australia Bank's (NAB) half-year results remained broadly unchanged on the same period last year at Aus$1.1 billion (£526 million). Profits were depressed by a global restructuring charge of Aus$229 million (£109 million), which relates to the bank's plans to reduce its staff numbers worldwide.

The bank has made a provision of Aus$44 million to cover restructuring costs in Europe. This includes rationalisation costs at NIB. Mr Savage said the bank did not, however, have the full details yet of how much of the provision was related to NIB or the impact it would have on its staff numbers.

He said the bank would be announcing details of the restructuring of its Irish business probably in November, when it's full-year results are issued.

NAB's Northern Ireland subsidiary, Northern Bank, also reported a stronger half-year performance, with profits up by 5 per cent to £45.2 million sterling.