NIB books €341m loan losses

Tue, Aug 10, 2010, 01:00

National Irish Bank has today posted a pre tax loss of €341 million for the six months to the end of June.

The bank, owned by the Danske Bank Group, was forced to set aside loan impairment charges of €367 million.

NIB reported an operating profit before impairment charges of €26 million, down 32 per cent. Income fell17 per cent to €84 million due to reduced customer demand, the impact of impaired loans and lower deposit margins. Costs fell by 6 per cent to €58 million.

“These results reflect the continuing difficult economic and banking market conditions. Our focus is on completing the restructuring programme we started last year and our work in this regard is on track,” NIB chief executive Andrew Healy said.

Mr Healy said National Irish Bank had no plans to increase mortgage rates at this time.

“These are tough times to be operating a bank in Ireland and we are fortunate to have the unflinching support of a strong parent in Danske Bank. We have taken early and decisive action to reduce our costs and to reposition National Irish Bank for a market which is being radically reshaped.”

NIB’s total loan book stood at €10 billion at the end of June, down 5 per cent on last year. Commercial property loans amounted to €3.3 billion, with most of the bank’s loan impairment charges in this area. Its mortgage book amounted to €3.6 billion.

Total deposits amounted to €4.2 billion, an increase of 3 per cent.

NIB made a pretax loss of €661 million in 2009, which Mr Healy described as possibly “the worst year in Irish banking history”.

Danske Bank, despite setting aside more than €1 billion for loan impairment charges, recorded a profit of €420 million in the six months to June 30th.

Northern Bank, the group's Northern Irish subsidary, posted a pre-tax loss of £16.7 million for the six months to the end of June, down from a loss of £75.1 million a year earlier.

Northern Bank suffered impairment charges of £42.2 million in the first half of the year and an operating profit before impairment charges of £25.5 million.