Danske Bank profits increase as mortgage approvals soar
DANSKE Bank in Northern Ireland has reported £35 million profits before tax for the first three months of 2016 as new mortgage approvals almost trebled.
The bank said approvals for new mortgage lending rose by 170 per cent on the same period last year while new lending to small and medium businesses was also up 52 per cent.
The profits before tax figure was 12 per cent up year on year while total income rose 5 per cent to £56.3m.
The banks reported a net reversal in loan impairments, which it said resulted from a number of factors including a continuing recovery in the property market and improved customer trading.
It said the turnaround exceeded any new and increased charges in respect of impaired loans resulting in a net recovery of £8.6m for 2016 to date.
Danske Bank UK CEO Kevin Kingston said: "Our underlying financial performance has continued its upward trajectory and we are maintaining a prudent approach to cost management.
“We started the year with an ambition to significantly grow our presence in the mortgage market, alongside maintaining our market leading position in business banking and among higher net worth customers through our Private banking and wealth units."
Danske's widely advertised cash-back offer on new mortgages helped to dramatically increase lending approvals.
“In quarter one a strong mortgage product offering and marketing campaign helped us to drive significant new mortgage business. New mortgage lending approvals for customers were up 170 per cent year-on-year," Mr Kingston added.
“To further stimulate the marketplace we have continued to extend the availability of our mortgages to prospective customers beyond traditional platforms and into the wider broker network. Today our mortgages are available via over 80 per cent of brokers across Northern Ireland. New mortgage lending via the broker channel was almost ten times higher than it was in the first quarter of 2015.
“With regards to our small and medium sized business customers, new lending was up by 52 per cent year-on-year. As well as attracting new customers, it has been particularly pleasing to see many existing customers starting to once again invest in growing their businesses."
Meanwhile, Ulster Bank's parent company Royal Bank of Scotland reported pre-tax losses of £968m for the first quarter - more than double last year's figure of £446m.
The loss reflects the impact of its £1.2 billion payment last month to the Treasury to buy out a crucial part of its £45bn bailout.
The payment ended a dividend access share (DAS) agreement with the government which was put in place in 2009 and prevented it paying dividends to any shareholders before the Treasury.
The bank said: "RBS remains on track with its plan to build a strong, simple, fair bank for customers and shareholders."
Income fell from £3.5bn to £3bn following the sale of its Citizens business in the US and the decision to dramatically scale back its overseas and investment banking offering.
The cost of restructuring the bank came in at £238m, with RBS expecting the number to grow to £1bn for the year.