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Danske Ireland post E2m operating loss

Thursday, February 07 10:20:35

Danske Bank Ireland this morning posted an operating loss of E2m for last year compared to a profit of E45m the year before but had to set aside less money for impaired loans, it said this morning.

The Danish-owned bank said it has set aside E750 million for loan impairment charges, down 12pc on the same period in 2011.

Income fell 13pc to E122 million due to continued low levels of customer demand, however non-interest income rose by 22pc to E18 million.

Costs rose by 29pc to E124 million, which it said is due to a one off provision for costs associated with the reorganisation of the bank's retail business as announced in June.

The Bank's total loan book was E7.2 billion.

Impairments are concentrated in the commercial property book and the quality of its E3.2 billion mortgage book remains "satisfactory", the statement said.

Customer deposits at E3.1 billion were up slightly on the previous quarter. The Bank's pricing in Ireland is in line with the Danske Bank Group's policy throughout Europe and the loss of some corporate and institutional deposits in Ireland earlier in the year was not unexpected, it said.

Commenting on the results, Terry Browne, Country Manager, Republic of Ireland said the Bank's performance in 2012 was in line with expectations and reflects Ireland's difficult economic conditions.

"Impairment levels remain high but are down 12pc year on year, and we're satisfied they are moving in the right direction. While reduced demand resulted in a 13pc year on year reduction in total income, non-interest income increased by 22pc reflecting the success of the Bank's advisory model. 2012 marked the beginning of a new era for the bank's operations in Ireland. We changed our name to that of our parent, Danske Bank and, at the same time, radically transformed our retail banking business to build a strong sustainable bank offering real competition in the Irish market," he said.

"Danske Bank now offers personal customers a competitive and efficient online and telephone banking service through a telephone and advisory team which is available seven days a week. We continued to invest in our mobile banking services with the launch of Ireland's first iPad banking app. We are leading the way by supporting our corporate and business customers through their migration to SEPA payments ahead of the industry deadline in February 2014."

"The changes to our business over the past year allow us to focus our advisory services on our Corporate & Institutional and Private Banking clients where we see great opportunity for growth. With the international banking and technology strengths of Danske Bank Group, we are well positioned to provide some of the important banking infrastructure needed to help the country's economic recovery," Mr Browne added.

By Joe Downes