Anglo Irish Bank saw its UK lending book increase 21% in the first half of its financial year, as it benefited from a “benign economic environment” and its network of regional offices.
The property lending bank increased its total lending in the UK, Ireland and the US by £5bn over the six months to 31 March, with £2.3bn of this coming from the UK business.
UK chief executive Declan Quilligan said: “We are operating in a relatively benign economic environment. These are good times. In the short term we expect interest rates to go up, but nobody expects a spike, which would be the killer.”
The bank saw pretax profits rise 35% to £263m, while total assets increased 22% to £42bn.
Quilligan put the bank’s success down to its partnership approach, with 70% of lending going to existing customers.
Non-performing loans remained relatively static at about 0.5% or £240m. Of these, Quilligan said he expected to write off just £20m. He said that, while he remained confident about the market, he did not plan to increase the bank’s risk profile.
“You have an element of the capital markets taking a greater risk, but on the whole our clients don’t need us to go up the risk scale,” he said. “We are still in the core senior debt areas.”
Looking forward, Quilligan said the bank had a £1.7bn pipeline of UK business, while he expected a net increase in total lending of around £3bn over the next six months.
He added: “What is driving capital market values is the liquidity in the market. Most people expect yields to compress a little bit further, just because of the sheer weight of money chasing property.”
