IIB profits increase by 10% to €137m

AFTER-TAX profits at IIB Bank grew by 10% to €137 million last year as lending growth cooled.

The bank, which is the Irish unit of KBC, Belgium’s second largest financial services company, said mortgage lending increased 14% in 2007, compared with 24% a year earlier.

Overall lending gained 11% to €17 billion, less than half the 25% rate recorded in 2006.

IIB chief executive Ted Marah said he expects activity in the mortgage market to remain muted during the early part of this year.

“The Irish residential market is undergoing a significant adjustment, with a slowdown during 2007 following now established extremely rapid growth,” he said.

“However the closer alignment of buyer and seller expectations and a greater balance between demand and supply should support healthier market conditions,” he added.

IIB will continue to examine the potential for opening further business banking centres in the years ahead, according to Mr Marah.

IIB chairman Guido Segers added: “The turbulence in world markets from August, together with deterioration in domestic consumer confidence, affected growth in the second half of the year.

“Against this backdrop, IIB Bank continued to show strong performance in 2007. With capital resources strengthened in recent years and a robust and efficient business model, the bank is well positioned across its market.”