Danske Bank NI records £20m profit drop

Danske Bank in Northern Ireland has reported a pre-tax profit of £77.4 million (€88.1 million) for the first nine months of 2017.

The latest financial results show a £20 million year on year fall in pre-tax profits - over the corresponding period in 2016 Danske Bank’s profits had previously hit £98.1 million.

The Copenhagen headquartered bank has blamed the "adverse impact" of the Bank of England's base rate on its income levels as well has higher expenses from a restructuring programme.

According to Danske Bank increased pension costs and the implementation of an “investment programme” has also flattened profits so far this year in the North.

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In July Danske sold its discretionary portfolio management wealth business to Davy Private Clients UK (Davy) the proceeds from the sale will not be listed until Danske’s quarter four financial results.

But the latest figures show the bank has benefitted from improving property values in Northern Ireland and has also enjoyed a boost from the improved fortunes of its local business customers.

Danske Bank, which has 44 branches and employs around 1,400 people in the North, reported a net credit in loan impairments of £18.1million over the first nine months of the year - down from £23.4 million for the same period last year.

Kevin Kingston, Danske Bank UK chief executive is upbeat about the bank's performance in 2017 and has highlighted strong growth in both customer lending and deposit volumes.

“Despite lower interest rates, the underlying performance of the bank is strong, with lending up eight per cent year-on-year. Our corporate customers, lending is significantly up - 30 per cent higher than over the same period in 2016.

“In personal banking it has been a record nine months for our mortgage business, with new mortgage lending also up 30 per cent year-on-year,” Mr Kingston added.

He said the bank has backed a number of significant investments by its corporate customers in quarter three including a major refinancing deal with the Herbert Group, the commercial redevelopment of The Weaving Works site in Belfast and the Toomebridge-based kitchen component manufacturer Uform.

Meanwhile, in the Republic the bank's corporate and institutional business has grown in the first nine months of 2017. "We are encouraged by this growth which has been underpinned by the expanding global footprint of our clients and increased Nordic business in Ireland," said Terry Browne, country manager at Danske Bank Ireland.