Friday, July 25 10:36:33
Ulster Bank made a first half operating profit of Stg55m thanks largely to a significant fall in impairment charges.
Its parent, RBS, this morning said that the Stg55m was split Stg9m in the first three months of the year and Stg46m in the second quarter.
RBS said that the impairment charge was significantly down for the first half of the year, from half a billion pounds to Stg57m.
Total income was Stg412m in the first half and whilst down 7pc compared to the same period a year ago, it is mainly non-interest income related, with net interest income up 7pc to Stg323m.
Goodbody noted that there is no indication of the margin for the first half, "though we know in Q1 it was up from 1.85pc to 2.36pc, but some of this related to the transfer of RCR assets".
Underlying costs in Q2 were flat on Q1 though there was a Stg10m pick-up in restructuring costs in the second quarter. Pre-provision operating profit was flat in Q2 at Stg56m on Q1. The H1 impairment charge dropped from Stg503m to Stg57m though this trend was already evident in the Q1 results.
Nonetheless, the Q2 impairment charge is only Stg10m after the Stg47m outturn in Q1, Elsewhere, net loans are down Stg0.8bn in Q2 from Q1, though may be negatively impacted by sterling moves late in the quarter.
"Our forecasts have operating profit of just over Stg100m for Ulster Bank for this year, so the Stg55m H1 performance leaves it very much on track for this outturn. The low Q2 impairment charge highlights the bank is benefitting from the improvements in the economy and collateral values, something to watch at AIB and BOI next week," the broker said.
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