Ulster Bank reports €1.2bn loss

Losses at Ulster Bank rose by 35 per cent last year as credit conditions in the Irish market remained "challenging", the bank said today.

Reporting losses of just over £1 billion (€1.18 billion), the bank said impairment charges increased by 19 per cent to £1.38 billion for the year ended December 31st 2011, compared with £1.16 billion a year earlier.

Operating profit before impairment losses was £40 million lower for the year, falling to £360 million.

Income was down by 7 per cent as the bank's performing loan book shrank and funding costs edged higher. The bank said loans and advances to customers fell by 5 per cent on a constant currency basis over the year.

The lower income was partly offset by cost-savings, the bank said. Expenses fell by 5 per cent due to cost cutting. Ulster Bank is seeking 950 job losses across the business this year, 600 of which will come from its operations in the Republic.

"2011 was another difficult year for the business due to the continued challenging economic environment," the bank said in a statement. "This was reflected in the financial performance, with ongoing pressure on income and a further increase in impairment losses."

Deposit balances from retail and small businesses grew throughout the year, it added.

"However, total customer deposit balances fell by 4 per cent in constant currency terms largely driven by the outflow of wholesale customer balances due to rating downgrades," the bank said.

Meanwhile, parent company the Royal Bank of Scotland Group, reported a wider full-year loss than analysts estimated, although it still paid out almost £1 billion in bonuses to staff in 2011.

RBS, 82 per cent owned by the British government after a state bailout during the 2008 credit crisis, reported a fourth-quarter loss of £1.8 billion, pushing it back into the red after it made a third-quarter profit of £1.2 billion.

RBS said staff costs at its GBM investment banking division, where it is cutting thousands of jobs, were £2.45 billion in 2011, down 9 per cent from the previous year.

It paid out £390 million in bonuses for its GBM investment bankers for 2011, down 58 per cent from 2010.

Across the bank, RBS paid out £985 million in bonuses, down 21 per cent from 2010.

The pay of RBS' top staff has become a sore point for many Britons, who remain angered by the fact that bankers have continued to pay themselves large salaries while elsewhere thousands lose their jobs as the global economy weakens.

RBS chairman Philip Hampton and chief executive Stephen Hester waived their bonuses earlier this month after politicians from all of Britain's major parties called on them to refuse the awards.

Additional reporting: Reuters