Profits up 16% at First Maryland

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ALLIED Irish Banks' US subsidiary has made strong progress in the third quarter, raising profits 16 per cent from a year earlier, writes Lisa Vaughan.

First Maryland Bancorp increased third-quarter profits to dollars 24.1m ( pounds 14.8m) after tax, bringing profits after tax for the nine months ended 30 September to dollars 68.4m, against dollars 51.2m a year before.

The results maintained First Maryland's reputation for being one of the more successful US acquisitions made by a bank from Britain or Ireland.

Improved interest margins and increased fee income helped to strengthen earnings despite sluggish loan demand, according to Charles Cole, president and chief executive officer of First Maryland.

Bad debts continued to dog the bank, but analysts said its performance compared favourably with competitors.

Non-performing loans were dollars 152.4m, equivalent to 2.4 per cent of total assets of dollars 8.9bn. That compares with National Westminster Bank's US subsidiary, NatWest Bancorp, where non- performing loans were an estimated 6.4 per cent of assets.

The bank has set aside dollars 204.9m for credit losses, 134 per cent of non-performing loans.

Allied made pre-tax profits of pounds 168.5m in its latest financial year.