NIB posts €14m loss for months to December

National Irish Bank (NIB) yesterday revealed a €14 million loss for the 10 months to the end of December. Claire Shoesmith reports

The bank, which was taken over by Danish finance group Danske Bank in March last year, said the loss was in line with its expectations and came as a result of money spent integrating the two operations.

As much as €26 million was spent last year on integration, according to Andrew Healy, NIB's chief executive.

About two-thirds of the costs were technology related with all of NIB's computers being adapted to make them compatible with Danske's network in Copenhagen, which itself also had to be upgraded to cater for the expansion.

Money was also spent on staff training, revamping the group's 59 NIB branches in the Republic, and the overall rebranding of the network.

Over the course of this year, a further €44 million will be spent on integration, according to Mr Healy, who said the bank won't make a profit until all this spending is out of the way.

However, he said that overall the business was performing well.

He said the integration was in line with the group's expectations and on target for a rebranded launch at Easter.

"The underlying performance of the business last year was very encouraging," he said, adding that over the course of the next couple of years National Irish Bank intends to increase its 3 per cent share of the Irish personal banking market and 4 per cent share of the business market by taking customers from the two main Irish banks.

He said the bank plans to focus on offering a total banking package to encourage customers to take all of their financial services from the one operator.

Full details of the group's new offerings will be released at Easter.

The results released yesterday showed that customer lending increased by a record 44 per cent in 2005.

Mortgage lending rose by 32 per cent, while retail deposits increased by 16 per cent.

Also yesterday, Danske Bank, which bought NIB and Northern Bank in Northern Ireland for €1.4 billion last year, reported a 37 per cent increase in net income to 12.8 billion Danish crowns (€1.7 billion) last year.

Total income was DKR34.9 billion , while net fee income was DKR7.3 billion.

The figures were boosted by particularly strong demand for remortgaging and securities trading activities.

In a statement, Danske said the integration of the two acquisitions was progressing well.

NIB employs 700 people at 59 branches and 13 business banking centres around the country.