Healthy growth in lending and deposits helped to lift Ulster Bank's profits by 12 per cent to £273 million (€407 million) last year.
The bank, which is owned by Royal Bank of Scotland (RBS) and is being merged with First Active, said yesterday that it attracted 36,000 new customers in 2003, with new mortgage business displaying particular strength.
The results were posted as RBS reported UK banking's largest ever pre-tax profit of £6.16 million. This was 29 per cent higher than in 2002.
Total income at Ulster climbed by £61 million to £581 million last year, with residential mortgages in the Republic the key driver behind the increase.
Mortgage lending at the bank, which operates in Northern Ireland and the Republic, grew by 43 per cent, as customers warmed to its more competitive rates and new products.
A spokesman for the bank said the combined Ulster/First Active entity holds about 15 per cent of the Republic's mortgage market, leaving it second behind Permanent TSB.
First Active, which was officially taken over by RBS last month, did not feature in yesterday's numbers.
Newly appointed Ulster Bank chief executive Mr Cormac McCarthy described the mortgage performance as "one of the great success stories of 2003".
He said the results as a whole were "very satisfactory" and looked ahead to the "exciting opportunity and strong platform" that he sees in the enlarged Ulster Bank group.
Last year's lending growth was reflected in higher provisioning for bad debts, which grew by £10 million to £32 million over the year.
A breakdown of the results show that Ulster's net interest income rose by 17 per cent to £396 million last year. Within this, average customer lending grew by 26 per cent to £10.1 billion, while deposits increased by 13 per cent to £8.9 billion.
Non-interest income rose by £4 million to £185 million, with an increase in lending, transmission and card fee income partially offset by lower dealing profits.
Meanwhile, overall profit growth was coupled with a 9 per cent rise in costs to £276 million. The bank said this reflected both pay awards and the extra expense needed to support business expansion.
Analysts said the bank's ability to grow profits faster than costs was a particular positive.
Ulster Bank's cost/income ratio dropped to 47.5 per cent last year from 48.8 per cent in 2002.
Brokerage fees within NCB, the Dublin-based stockbroking firm sold by Ulster bank in October, weakened on what the bank called "uncertainty in the equity markets".
NCB is now owned by its managers and staff.
