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29th April, 2008
- Profit up 11% to £20m before one-offs and costs associated with the migration to Danske Bank’s banking platform
- Net interest income up 3% to £41m
- Total commercial lending up 21%
- Commercial deposit growth up 7%
- Operating expenses fell 9% to £30m excluding migration expenses
- Credit losses remained modest at £3m
- Overall net profit before tax including costs associated with migration is £12m compared to £5m for the same period in 2007
BANKING ACTIVITIES NORTHERN IRELAND
(£m) |
Q1
2008 |
Q1
2007 |
Index
08/07 |
Net interest income |
41 |
40 |
103 |
Net fee income |
10 |
12 |
83 |
Net trading income |
2 |
2 |
100 |
Other income |
- |
- |
- |
Total income |
53 |
54 |
98 |
Amortisation of intangible assests |
7 |
10 |
70 |
Integration expenses |
1 |
3 |
33 |
Other operating expenses |
30 |
33 |
91 |
Operating expenses |
38 |
45 |
83 |
Profit before credit loss expenses |
15 |
8 |
- |
Credit loss expenses |
3 |
3 |
100 |
Profit before tax |
12 |
5 |
- |
Loans and advances, end of period |
6.204 |
5.116 |
121 |
Deposits, end of period |
5.559 |
5.187 |
107 |
Allocated capital (avg) |
259 |
209 |
124 |
Profit before credit loss expenses as % p.a
of allocated capital |
23,2 |
15,3 |
- |
Pre-tax profit as % p.a of allocated capital
(ROE) |
18,5 |
9,6 |
- |
Cost/income ratio % |
71,7 |
85,2 |
- |
Cost/income ratio,excl total
integration expenses % |
56,6 |
61,1 |
- |
For the first three months of 2008 Northern Bank has reported a £20m pre-tax profit, excluding costs associated with the migration to Danske Bank’s banking platform. Total income has been maintained at 2007 levels in difficult market conditions and alongside a 9% reduction in operating expenses has delivered an 11% growth in profit.
Total commercial lending increased by 21% with total deposits rising by 7%.
The relatively modest credit loss expenses reflect the consistently high credit quality of the loan portfolio.
Commenting on the results, Chief Executive Officer Don Price said: “Northern Bank is very well capitalised and retains a sound funding position, given the strength of our Retail deposits.
“This is reflected in our encouraging retail performance in the first quarter of 2008.
“Our Cash Management and business e-banking systems continue to add real value for our business customers and the creation in quarter one of a new Corporate Acquisition team will help drive further growth in this area.
“In spite of the general economic slowdown, Northern Bank maintains its outlook for profitable growth as a result of realised synergies and the prospect of stable lending margins.”
-ENDS-
- Northern Bank is a subsidiary of Danske Bank.
- The results relate to the Banking Activities of Northern Bank which serves both retail and corporate customers. Banking Activities Northern Ireland has 94 branches and around 1,300 employees.
- Danske Bank Group is the largest bank in Denmark and one of Europe’s leading financial institutions.
- Danske Bank Group currently has ratings of AA1 long term and P-1 short term (Moody’s); AA- long term and A-1+ short term (Standards & Poor’s); and AA- long term F1+ short term (Fitch).
- Based on Danske Bank’s powerful technology platform, Northern Bank offers leading edge product and service proposition for personal business.
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