Danske Bank Group financial results
- Profit before tax and impairment charges up 9% to £1,207 million (H1 2011: £1,110 million)
- Profit before tax up 2% to £444 million (H1 2011: £433 million)
- Loan impairment charges amounted to £763 million (H1 2011: £677 million)
- Total Tier 1 capital and total capital ratios were 16.2% (H1 2011: 16.6%) and 17.7% (H1 2011: 18.8%)
Northern Bank financial results
- Operating profit increased by 60% to £35m
- Impairment charges £100m
- Total Income increased by 3% to £94m
- Total Costs reduced by 14% to £59m
|Profit before loan impairment charges
|Loan impairment charges
|Profit before tax
Operating profit of £34.8m for the half year represents a 60% increase on H1 2011, with improvements in both operating income and costs.
Income has increased, despite continued low activity levels, a strong performance in the current difficult economic climate. Overall lending volumes fell by 7% year on year reflecting impairments and business customers deleveraging; however mortgage balances grew 4% over the period. Deposit balances have been maintained at 2011 levels, again, a strong performance in the current environment. The Bank’s overall deposit to loans ratio remains very strong at over 100%.
Costs have been reduced significantly, reflecting exceptional expenses in H1 2011 and lower underlying costs in the current year as the Bank continues to manage expenditure tightly.
As at 30th June 2012 Northern Bank’s solvency ratio stood at 20.7% and tier 1 capital ratio at 14.0%.
Commenting on the results, Chief Executive Officer Gerry Mallon said:
"The underlying performance of our business in the first half of the year is very promising, with a 60% rise in profit, year on year. This reflects a consistent reduction in costs alongside our commitment to balanced income growth. Impairment charges remain substantial, but lower than in the same period last year and a considerable reduction from £72.5m in Q1 to £28.2m in Q2 this year is encouraging progress in the right direction.
We’ve maintained a clear focus on attracting new customers and growing our business and importantly we have the capacity for this growth. While business confidence generally remains subdued, we are committed to our strong position in the business market. Our appetite and capacity to lend to local businesses still exceeds current demand and this is reflected in our lending figures.
New mortgage customers have been attracted by the substantial savings offered through our competitive pricing, resulting in mortgage growth of 4% in the first half of the year. Consumer habits continue to evolve and we are responding to those trends. For our branch network this resulted in the merger of ten branches over the past six months, but also the introduction of extended weekend opening hours in our larger branches. Across Northern Ireland, 21 branches are now open all day on Saturdays, enhancing customer choice and flexibility.
The second half of 2012 will undoubtedly remain challenging, but we have proven that we have both the capacity and the capability to robustly withstand those challenges
From November 15th we will rebrand as Danske Bank in a strong signal of our parent company’s long term confidence in Northern Ireland. The rebrand provides us with a unique opportunity to set ourselves further apart from the competition and to reaffirm our position as a leading European bank in the local market. As Danske Bank, we look forward to bringing the best of progressive, local and com-petitive banking to consumers and businesses in Northern Ireland."
Useful Links and Downloads
Download Northern Bank Half 1 2012 Financial Results Press Release
Danske Bank Group’s Interim Report – First Half 2012