Danske Bank Group financial results
- Profit before impairment charges up 20% to £617m (Q1 2011: £514m)
- Profit before tax up 5% in Danish Kroner to £177m
- Loan impairment charges amounted to £440m (Q1 2011: £337m)
- Tier 1 capital and total capital ratios were 16.0% (31 March 2011: 14.6%) and 17.6% (31 March 2011: 17.4%)
Northern Bank financial results
- Total income increased by 11% to £47.5m
- Total Costs reduced by 4% to £29.5m
- Underlying profit increased by 51% to £18.0m
- Impairment charges £72.5m
Impairment charges and provisions
|Profit before tax
The NI economic environment remains fragile as is reflected in the continued level of impairment charges. These charges remain elevated given the ongoing condi-tion of the property market, where we have continued to take a very cautious assessment of the valuation of impaired assets.
Operating profit before impairments and provisions of £18.0m for the quarter represents a 51% increase over the same period in 2011, a result of significant improvement in both operating income and costs.
Income levels have increased by 11% year on year, despite continued low interest rates, low economic activity and falling volumes – a strong performance given the current difficult economic climate. Overall lending volumes fell by 7% with deposit balances 5% lower compared to Q1 2011. The Bank’s overall deposit to loans ratio remains above 100%. Costs have continued to be managed tightly and are 4% lower than in Q1 2011.
As at 31st March 2012 Northern Bank’s solvency ratio stood at 20.2% and tier 1 capital ratio at 13.5%.
Commenting on the results, Chief Executive Officer Gerry Mallon said:
"I am very pleased with the strong underlying performance of our business, with profit up 51% and income and costs moving strongly in the right direction. However, we are not immune to the environment in which we operate. National and international market conditions remain challenging and have led to a continued high level of impairment charges.
"Despite the external factors beyond our control, we are in a strong position to meet the challenges ahead and to win new customers from our competitors.
"We have started the year as we mean to go on, by launching a very competitive mortgage campaign aimed at both First Time Buyers and Switchers, which is successfully growing our mortgage lending.
"A sustained focus on attracting new corporate business to Northern Bank and local leadership across our seven business centres, have been instrumental in
our continued growth. Securing the Corporate Banking Team of the Year award at the Insider Dealmaker Awards for the second consecutive year, demonstrates that our strength in this market is undisputed.
"As a modern, progressive bank we continue to be responsive to changing consumer habits and an evolving industry. More and more customers are attracted by our online and mobile solutions and during the quarter we hit a significant milestone, registering our 100,000th customer for online banking.
These same changing consumer habits have, however, also informed some difficult decisions and in quarter one we announced the closure of six branches.
"There is no doubt that 2012 will be a tough year for Northern Ireland, with continued low economic growth, low interest rates and a sluggish property market leading to elevated impairment charges. However, as a bank with a very high level of capital and liquidity, a strong parent, and still 100% shareholder owned, we are well placed to comfortably withstand the economic conditions. Our clear direction, competitive products and services and appetite for growth we are also well equipped to strengthen our market position further."
The Danske Bank Group’s Interim Report for Q1 2012 is available at