Bank of Ireland has delivered a 13 per cent rise in pretax profit for the year to March - in line with forecasts - and said strong economies in its main Irish and UK markets gave it optimism for the coming year.
But it warned profits in asset management would weaken further this year after a poor investment performance at the Bank of Ireland Asset Management (BIAM) division triggered a fund outflow.
The bank reported robust health at its operations in the Midlands, which include a site in Birmingham city centre and another in Solihull.
The bank said it was looking to expand its operations in Birmingham and had recently added four bankers to its team in the last three months.
A spokesman for the Birmingham operation said: "We have had record levels of business activity and the pipeline of future work is still very strong.
"Our core markets are not slowing down, and the decision to hold interest rates means merger and acquisition, property and corporate activities will remain robust."
Chief executive Brian Goggin cautioned: "The performance of the overall asset management business in profit terms will deteriorate further before it recovers.
"We're talking a two-three year period of recovery here.
"The profit for the year 2005/6 is clearly going to be impacted to a much greater extent than the year just ended because the outflows happened in the back end of the year."
The group, pursuing a transformation programme that will include 2,100 job cuts to reduce costs, saw pretax profits up by 13 per cent from £798 million to £901 million.
But its asset-management services division reported an eight per cent fall in pretax profits to £78 million.
Assets under management in BIAM fell by £7.2 billion to £32 billion in the year.
Mr Goggin said discussions with unions over the bank's proposed job cuts was progressing well and he hoped to conclude negotiations by the end of May.
He also said he was optimistic about overall business prospects for the coming year given the strength of the UK and Irish economies and said there was no sign of the UK economy derailing.
The bank made no new announcement on its Bristol & West branch network in Britain, which it has now decided is no longer core to its business.