Irish Nationwide Building Society has reported pre-tax profits of €391m for 2007, an increase of 64% from the €239m reported in 2006.
However, the building society's gross lending fell to €4.316 billion in 2007 from €4.961 billion the previous year, reflecting the slowing housing market here.
It said its loan book now stands at €12.332m, up 18% on the previous year. Customer accounts increased by 10% from €6.603 billion to €7.250 billion.
Irish Nationwide said the results were achieved against a background of a weakening economy and a reduction in demand for housing with progressively falling prices throughout the year.
Nationwide's CEO Michael Fingleton said that the society benefited from its lending strategy by realising significant fee income from matured secured property transactions, which contributed to its profitability. It also made €41m from selling its shareholding in one of its subsidiary companies.
He said that in the light of the present uncertainty in the financial markets and the weakening economy, the society's policy in 2008 will be to manage its affairs in a 'prudent and conservative risk adverse manner'.
Mr Fingelton said that Irish Nationwide never engaged in nor invested in any of the sub-prime or related financial instruments. 'Our treasury department's sole function is to source and manage our liquid funds which are held in short term cash deposits with highly rated financial institutions'.
'The society believes that 2008 will be a challenging year for all financial institutions. Because of the society's strong liquidity, strong reserves and strong capital base, together with an exceptionally strong balance sheet, we are well positioned to compete strongly in whatever areas of the market challenges emerge,' he said.
Despite the present state of the financial markets and the effect on valuations, Mr Fingelton said that the society's sale process is still ongoing with a number of interested parties.
'The society had expected to have a sale agreed prior to the end of 2007. However, the turmoil in the world financial markets has had a negative effect on the value of financial institutions and consequently on the funding of acquisitions,' Mr Fingelton said.
'We however remain fully committed to a sale, subject to achieving a price which fairly reflects the value of the society's business,' he added.
