Aggressive pricing by a small number of lenders in the Irish mortgage market is not sustainable over the long term, the EBS chairman said yesterday.

"It is very possible for somebody to come in and engage in predatory pricing practices. Don't expect them to last the lifetime of the mortgage," Mr Brian Joyce told members at the company's annual general meeting.

After the meeting, EBS managing director Mr Ted McGovern denied the building society was being squeezed by new competition and defended the rise in pre-tax profits of just 8 per cent.

"All we're looking to do is raise sufficient profits in line with our overall objectives, which will enable us to keep our capital ratios right, continue to get funding and to continue to invest in the business.

"So it's not about absolute profitability. It's about creating value for customers and sharing that around," he said.

He added that the board was happy with the level of growth in EBS's residential loan book - 19 per cent compared with growth of around 25 per cent in the overall mortgage market.

"We took a prudent view of the housing market over the course of the last year because of the fact that it was growing at a rate I think most people were concerned about," said Mr McGovern.

"We didn't chase the market, so we figure 19 per cent is an exceptional level of growth."

Renewing EBS's call for a national housing authority, Mr Joyce said: "Measures to date have been directed more towards stabilising prices rather than dealing with the root cause of the problem which remains an inadequate supply of affordable housing."

EBS also announced details of its proposed new special savings incentive scheme account, which will allow customers to choose between any combination of deposit and managed funds.

The initial deposit rate is guaranteed at a minimum of 4.25 per cent until July 31st, with a price promise on the deposit account option that the interest rate will be not less than 0.5 per cent under the European Central Bank base rate.

A minimum monthly contribution of £10 is allowed for the deposit product, with a minimum of £40 for managed funds.

The EBS scheme carries no entry or exit costs, no policy fee, no administration fee and a management charge of 1.5 per cent.

Switching is allowed between the various deposit and managed fund options at no cost, EBS said.