Ulster Bank profit slumps 66% amid ‘legacy’ issues

Bank reports a €11m operating profit for first quarter, down from €32m last year

Ulster Bank's operating profit slumped by almost 66 per cent in the first quarter as the lender set aside money to absorb impaired loans and the cost of resolving "legacy business issues" in the Republic.

The bank's parent, Royal Bank of Scotland, reported in its latest quarterly report on Friday that Ulster Bank reported a €11 million operating profit for the period, down from €32 million for the corresponding three months last year.

While Ulster Bank released €28 million of provisions in the first quarter of 2017 that had previously been taken for soured loans, it has taken a €9 million charge so far this year. In addition, the bank booked €11 million “for remediation and project costs associated with legacy business issues”.

Ulster Bank, which is understood to be lining up senior RBS official Jane Howard as its next chief executive after Gerry Mallon signalled in January he was quitting to head up Tesco Bank in the UK, plunged into a €151 million operating loss last year as it set aside an additional €192 million to cover refunds, compensation and other costs related to the country's tracker mortgage scandal and other incidents of overcharging.

The bank revealed this week that its previously-disclosed 3,500 number of customers that were either denied their right to a low-cost mortgage linked to the European Central Bank’s main rate, or put on the wrong rate, is set to rise by between 1,500 and 2,000 as it looks to draw a line under the controversy.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times