Ulster Bank chief ‘committed long term’ to lender
Bank posts €87 million loss for third quarter
Ulster Bank’s total income increased by €3 million, or 1.8 per cent, in the third quarter of 2018 compared with 2017. Photograph: Alan Betson
Ulster Bank’s new chief executive, Jane Howard, has said she is “committed long term” to the lender, as she settles the new role at the UK-owned lender, Royal Bank of Scotland (RBS), according to union officials.
Ms Howard “reiterated RBS’s commitment to Ulster Bank and its future, but recognised the challenges it faces, in particular the ongoing tracker scandal,” said Gareth Murphy, acting general secretary at the Financial Services Union (FSU), in response to questions from The Irish Times after he briefed members on a meeting with the bank chief this week.
The new chief executive, a former senior RBS executive in the UK, took over the position at the end of September, succeeding Gerry Mallon, who quit earlier this year after 18 months. A spokeswoman for the bank declined to comment on the union meeting.
Ulster Bank on Friday said it had made a loss of €87 million in the third quarter of 2018, compared with a profit of €36 million during the same period the year before, results from the bank’s parent show.
The bank’s total income increased by €3 million, or 1.8 per cent, compared with 2017, reflecting an increase in lending income and lower cost of deposits.
There was an increase of 14 basis points in net interest margin, largely offset by a reduction in income from free funds.
Net interest margin decreased by 19 basis points compared with the second quarter of this year. This primarily reflected a €13 million one-off funding benefit in the previous quarter.
Operating expenses increased by €47 million, or 33.3 per cent, compared with 2017, principally due to higher litigation and conduct costs, largely relating to customer remediation and project costs associated with “legacy business issues”.
The bank said a net impairment loss of €68 million included a provision for a further non-performing loan sale that it expects to materially reduce its “non performing exposure ratio”.
Risk-weighted assets reduced by €400 million compared with the previous three months, principally reflecting an improvement in credit metrics.
The bank’s parent, RBS, reported an operating profit before tax of £961 million for the third quarter, compared with £871 million in the same period the year before, and £2.8 billion for the year to date.
It has set an extra £100 million aside to account for possible bad loans as a result of Brexit uncertainty, in the first concrete sign this is clouding the outlook of a big British bank. – Additional reporting: Bloomberg