ICS reports 17% profit surge in 2003

THE Bank of Ireland-owned ICS Building Society has reported a 17% surge in profits as it continued to benefit from demand for house loans.

The ICS said its pre-tax surplus for the year to end December was up from €68.3 million to €79.9m on the back of a 25.6% rise in total advances and a 26.9% rise in mortgage balances. At the end of the year ICS had loaned out €3.4 billion in mortgages to customers.

The society's cost/income ratio fell 2.1% to 25.1%, though this is higher than at rivals Irish Nationwide.

ICS managing director Joe Larkin said yesterday that last year was an excellent year for the building society with the sustained growth in house prices driving profits.

"2003 was a buoyant year for the mortgage market and we took our share of it. When you put that together with what we do on behalf of Bank of Ireland it makes us the biggest mortgage lender in the country."

The strength of house prices, which grew by nearly 14% this year, was a surprise to many lenders, but Mr Larkin said the factors contributing to that growth were continuing.

He said although supply is at record levels, demand from first-time buyers and investors was keeping price inflation at double-digit levels, though home-owners should not expect to see the value of their property rise as much this year.

Mr Larkin said: "The first three months were exceptionally strong, but we don't see that continuing as there is plenty of supply coming on stream. Days of double-digit property price inflation appear to be over."

Mr Larkin said the society expects to see interest rates remain flat this year before rising in 2005. He said the society regularly stress-tested its mortgage book to find out if customers could make their repayments if interest rates rose by 2% and that it was satisfied with the "excellent" quality of its loan book.

ICS Building Society's retail chain, The Mortgage Store, also recorded a strong 2003, opening its 10th branch in the Dublin's IFSC and is considering further outlets.