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Bank of Ireland profits up on retail banking

Bank of Ireland has posted a 16% rise in its full-year group profit to E1.39 billion with record business levels in it main divisions, which the lender attributed to Ireland's strong economic growth over the last decade.

In business banking, loans to small and medium enterprises grew by 23% over the year, while personal lending was up by 13%. The group’s life and pensions business also performed strongly, with a 65% rise in profit before tax to E134 million compared to the previous year.

The bank said of its life business: The economic and demographic backdrop to our life business in Ireland is very supportive: a strong economy, a growing population, significant job creation, rising incomes, an excellent savings ratio and the need for substantial investment in personal pension provision providing significant opportunities. The outlook remains very positive.

However, the asset management division recorded a 32% decrease in profit from the previous year, reflecting the full year impact of the mandate losses since September 2004. Fund outflows continued, the bank said, but at a slower pace.

The bank said that it is ahead of target in the first year of its strategic transformation program.