- Overall net profit before tax of £28m compared to £13m for the same period in 2007
- Net interest income down slightly to £122m due to intense price competition and falling interest rate
- Total commercial lending up 11%, deposits remaining stable
- Operating expenses fell 28% to £110m and significantly improved cost/income ratio
- The economic slowdown has resulted in an increase in loan impairment charges
| Net interest income |
122 |
125 |
98 |
| Net fee income |
29 |
34 |
85 |
| Net trading income |
9 |
7 |
129 |
| Other income |
2 |
1 |
200 |
| Total income |
162 |
167 |
97 |
| Amortisation of intangible assets |
7 |
30 |
23 |
| Integration expenses |
5 |
23 |
22 |
| Other operating expenses |
98 |
99 |
99 |
| Operating expenses |
110 |
152 |
72 |
| Profit before loan impairment charges |
52 |
15 |
- |
| Loan impairment charges |
24 |
2 |
- |
| Profit before tax |
28 |
13 |
215 |
| Loans and advances, end of period |
7,042 |
5,688 |
124 |
| Deposits, end of period |
6,068 |
5,594 |
108 |
| Allocated capital (avg.) |
261 |
223 |
117 |
| Profit before loan imp. charges as % p.a. of allocated capital |
26.6 |
9.0 |
- |
| Pre-tax profit as % p.a. of allocated capital (ROE) |
14.3 |
7.8 |
- |
| Cost/income ratio (%) |
67.9 |
91.0 |
- |
| Cost/income ratio, excl. total integration expenses (%) |
60.5 |
59.3 |
- |
For the first nine months of 2008 Northern Bank has reported a £28m profit. Total income has been maintained close to 2007 levels in difficult market conditions. This, together with a significant reduction in expenses mainly due to lower integration expenses and tightly managed operating expenses, has delivered a doubling of profit before loan impairment
charges.
Total commercial lending increased by 11%, including 10% growth in mortgages, with total deposits remaining flat year on year.
Commenting on the results, Chief Executive Officer Gerry Mallon said:
"The efficiencies that we have put in place since becoming part of Danske Bank Group have resulted in a lower cost base. This is reflected in our interim results and significantly improved cost/income ratio."
"Despite challenging times in the global economy and markets, Northern Bank is still very much 'open for business' and confident of the competitive consumer choice and service that we offer."
"We have maintained a 10% growth in mortgages in a market that continues to experience a significant slowdown, with competitive products available consistently throughout turbulent times. Our advertising campaigns highlight the product range we continue to offer, from mortgages, to personal current accounts, to our world class Cash Management services. And it's working. We are seeing growing numbers of personal customers and also exciting expansion in the youth market, and have steadily maintained growth in the business market through continued prudent commercial lending."
"More and more customers are actively using self- service channels such as eBanking and Business eBanking, including Cash Management, which frees staff to spend more time face to face with customers. This in turn has resulted in our highest ever customer satisfaction levels and an increase in cross sales within both the business and personal markets."
"Not surprisingly, the global financial crisis is reflected in our bad debt provision and these results show prudent provision for potential losses."
"Together with the strength of Danske Bank Group behind us, these results should give customers confidence that Northern Bank has consistently applied sound and secure banking practices, remains a safe, low risk bank for their deposits and can meet the needs of customers even in the most challenging times."
ENDS
The full Danske Bank Group Interim Report is available at
www.danskebank.com/reportsNORTHERN 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 THREE REGIONS WITH 91 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 AALONG TERM F1+ SHORT TERM (FITCH).
BASED ON DANSKE BANK’S POWERFUL TECHNOLOGY PLATFORM, NORTHERN BANK OFFERS A LEADING EDGE PRODUCT AND SERVICE PROPOSITION FOR PERSONAL, BUSINESS AND CORPORATE CUSTOMERS.