The Irish subsidiary of the Bank of Montreal, which has 15 staff, has accumulated €324.3 million in profits since it established an office in Dublin in 1996, new filings reveal.

Bank of Montreal Ireland, whose parent is one of the dominant "big five" banks in Canada, said in a financial statement for the year to October 2005 that its pretax profit grew to US$39.01 million (€32.42 million) from $36.3 million.

The bank carries out a proprietary trading and capital markets business at Earlsfort Terrace, Dublin.

Its status as an IFSC company meant it paid corporation tax at the low rate of 10 per cent until January, when the rate increased to the standard corporation tax rate of 12.5 per cent.

With accounts now with the Companies Office showing operating profits on the rise to $37.74 million from $36.3 million, the pretax profit was helped by a $1.27 million write-back for bad and doubtful debts.

The increase in profits was recorded in spite of a decline in the bank's net interest income, which fell to $76.06 million from $103.99 million in the previous financial year.

However, the bank cut its dealing losses to $34.07 million from $63.57 million in the year earlier.

"While a substantial portfolio of equities are maintained for trading purposes, any losses incurred in this activity are recovered by way of a total return swap. Losses in this activity are therefore offset by a gain in interest income," said a note with the accounts.

After paying corporation tax of $3.61 million, the bank's net profit for the year was $35.4 million.

In common with other periods, the bank did not pay out a dividend to its parent. Thus the value of the profits accumulated in its profit and loss account rose at the end of the financial year to $390.17 million (€324.3 million).