NIB pretax profits double in first quarter

Pretax profits at National Irish Bank (NIB) during the first quarter doubled from €3 million last year to €6 million due to a rise in mortgage lending and business loans.

In a statement this morning NIB said it has increased its loan book to €9.6 billion, a 27 per cent year on year growth and a rate that is twice the market average.

Over the three months to March 31st, NIB's mortgage lending grew by 29 per cent and its business lending rose 26 per cent

NIB chief executive Andrew Healy said customer deposits had increased by 14 per cent year on year. He said NIB's mortgage, business lending and deposit growth figures were also "well ahead of the market".

While the economic slowdown has resulted in tougher operating conditions, Mr Healy said "as part of Danske Bank Group, National Irish Bank is the highest-rated full service bank in Ireland".

The bank's total income grew 14 per cent to €47 million and its operating costs fell 3 per cent over the period.

Credit losses increased from €1 million to €5 million reflecting, according to the bank, "higher general provisions and an increase in the size of the loan book". Credit losses amounted to 0.20 per cent of the total loan book.

Mr Healy said NIB would introduce a 4-month fixed term deposit account with a 5 per cent rate on balances up to €65,000 in May. 

NIB is in the middle of refurbishing and expanding its branch network. It said ten new branches will be added by the end of 2009. The bank also plans to merge a small number of branches over the coming months.

Danske Bank, which bought National Irish Bank in March 2005, this morning posted a first-quarter pretax profit of 3.41 billion crowns; down 36 per cent from a year earlier on lower trading income and higher costs, and below market estimates.

Analysts polled by RB Boersen had expected a first-quarter pretax profit of 3.92 billion crowns. The bank said it expects full-year net profit to be 6 per cent to 13 per cent lower than in 2007.

"The substantial financial turbulence in the capital markets and the lower real economic growth... have affected the income basis more than expected at the presentation of the Annual Report 2007," it said.

Danske Bank had previously forecast full-year net profit to rise between 0 per cent and 7 per cent from 2007's 14.9 billion crowns.

First-quarter net interest income increased 9 per cent to 6.2 billion crowns, while net trading income was down 26 per cent at 1.4 billion crowns.

Pretax profits at National Irish Bank (NIB) rose from €4 million to €28 million last year on the back of increased business loans and demand for the bank's lower-rate loan-to-value mortgages.

Additional reporting agencies.