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Ulster posts a profit as bad loans fall

Friday, August 01 11:04:03

Ulster Bank today reported an operating profit of Stg55m (E67m) for the first half of 2014 compared to a loss of Stg381m as impairments from bad loans fell, its first profit since 2009.

The bank - which is majority owned by the British state through its parent company Royal Bank of Scotland - said impairment losses had reduced by E543m, or 89pc, compared with the same period of last year.

It said it made an adjusted operating profit of £69 million for the period, a second consecutive quarterly profit. This compared with a loss of £335 million for the first half of 2013.

Its net interest margin improved by 50 basis points to 2.32pc and its net interest income increased by £21 million.

Ulster Bank's expenses improved by £22 million as a result of a continued focus on cost control and a reduction in restructuring and conduct-related costs.

Impairment losses reduced by £446 million while its loan/deposit ratio improved to 108pc.

The bank said the "macroeconomic environment across the island of Ireland has stabilised considerably but trading conditions continue to be volatile and the regulatory environment remains challenging”.

Commenting on the results, chief executive Jim Brown said: "Today's results demonstrate a second consecutive quarterly profit, the success of our existing strategy and sustained progress across all areas of the bank.

"The half-year adjusted operating profit of £69m (E 84m) reflects an improvement in net interest margin, a reduction in expenses and an improvement in impairment losses. "Impairment losses have improved by 89pc, while the number of customers in mortgage arrears has now decreased month on month for the past 15 months, reflecting the investment to date in supporting customers in difficulty.

"In total, the number of customers in arrears in the Republic of Ireland has reduced by 10,000 compared to the same point in 2012.

"We are approving over 90pc of applications and our tailored supports for agriculture, start-ups, food/ drink and manufacturing are driving much of this demand. We have seen a 44pc increase in mortgage drawdowns and 45pc increase in mortgage offers compared to H1 2013."

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