NORTHERN Bank, the National Australia Bank subsidiary in Northern Ireland, reported a 32 per cent rise in pre tax profits to £40.3 million for the six months to the end of March.
Profits were boosted by two nonrecurring gains which added £7.3 million to the latest result. These exceptional items were a profit of £4.8 million on the sale of shares in Tyrone Brick and a gain of £2.56 million on the settlement of an appeal against a 1992 court judgment in a claim brought by a Norwegian bank.
Underlying profits rose by 7.8 per cent when the once off gains are stripped out. Northern Bank will pay an interim dividend of £11 million to its parent out of after tax profits of £26.8 million.
Lending increased by 18.6 per cent, bringing the loan book to £2.034 billion while deposits were 10.6 per cent higher at £2.37 billion.
The bad debt charge for the period doubled to £2.8 million, but chief executive Mr John Wright said the rise was a timing factor. "There was no underlying issue here," he said, adding that the full year charge would be in line with the £5 million level in 1994/95.
Loan demand remains strong in Northern Ireland, he said. But with a strong position in the agricultural sector, he was concerned about the failure to resolve the BSE problem. The bank maintained its net interest margins, which he declined to disclose, by tailoring special loan and savings products for specific niche markets, he said.
