Ulster Bank posts quarterly loss of €195m

Ulster Bank posted losses of €195 million for the first quarter of 2013 in what was described yesterday as “a significant improvement” on previous performance.

Year on year, the bank has reduced operating losses by €173 million (£146 million), a 47 per cent saving, and cuts losses by €94 million (£79 million) against the first three months of 2012.

Parent company Royal Bank of Scotland (RBS) in the UK posted a worse than expected quarterly drop in operating profits, resulting in a significant fall in share price.

At Ulster Bank, impairment losses fell by £154 million compared with the first three months of 2012 to £240 million, a decline of 39 per cent, as the bank noted a “significant” reduction in losses on the mortgage portfolio.

Before impairment charges were taken into account, it reported a profit of £76 million. However, net interest income was down year on year, falling by £11 million as customer loan balances also reduced and the impact of impaired loans was felt.

This was partly offset by a rise in non-interest income of £5 million. Deposit balances rose too, climbing 7 per cent compared with the first quarter in 2012, as the bank continued to strengthen its balance sheet.

Ulster Bank’s loan-to-deposit ratio stood at 127 per cent in the first quarter of the year, compared with 147 per cent a year earlier.

Commenting on the results, chief executive Jim Brown said: "As the economic environment stabilises, Ulster Bank continues to make good progress on the restructuring of its core bank, with a significant decrease in operating and impairment losses, an increase in customer deposits, an improvement in the loan to deposit ratio, and a stable net interest margin."

At RBS, operating profit declined to £829 million in the first quarter from £1.16 billion a year earlier. That missed the £1.2 billion estimate of six analysts in a recent survey, and shares fell by as much as 8.9 per cent in London in early trading.

Chief executive Stephen Hester yesterday said the bank was "running hard to stand still".