Business

Danske Bank reports improved half-year profits of £48m

Danske Bank had profits of £48m over the first half of 2016

DANSKE Bank in Northern Ireland saw new mortgage approvals more than double in the first half of 2016 compared to the same period last year.

Lending approvals were up 108 per cent in the six months as the bank also saw profits -before impairments - increase 13 per cent to £48 million.

Danske said the financial results were due to improved revenue and cost control.

It said new lending in business banking up 40 per cent while total income increased 4 per cent to £112.7m and expenses were 2 per cent down to £64.7m.

The bank said recover in the property market and improved customer trading resulted in a net recovery of £16.5m from loan impairments.

Danske Bank UK CEO Kevin Kingston, said: "The underlying performance of the bank continues to improve, while at the same time impairments continue to fall. Operating profit is up 13 per cent on last year and our cost base is lower as a result of a tight control on expenditure.

“In personal banking we continue to focus on our mortgage business where we have enjoyed a very strong performance so far this year. We have seen a substantial increase in mortgage applications, resulting in a 108 per cent increase in approvals to customers year-on-year. New mortgage lending volume via the broker channel was nine times higher than it was in the first half of 2015.

“We have also launched several new products this year, including a reward-based personal current account, offering customers £7 per month cash back. In doing so we became the first of the four main local Northern Ireland banks to provide such an account to the marketplace. The account has an annual fee of £24 (£2 per month) with customers able to claim a full year cash reward of £84 (£7 per month).

“For small business customers we have provided a unique offering of £500 cash back for switchers and start-ups. Since this incentive was introduced in April we have seen an average of 45 new small business relationships established every week. Small and medium sized businesses are a key target segment for the bank and we are delighted that year-on-year new lending volumes in this area are up 40 per cent.

“On the corporate banking side, overall demand in the marketplace has been more subdued compared to the same period last year. However commercial property and social housing transactions have remained buoyant.

“Indicators show that uncertainty around the EU referendum outcome is impacting upon general business confidence. However our local businesses are well used to dealing with challenges and change, and we remain confident that they will adapt as required to ensure continued growth. We will continue in our role as a trusted local financial partner - on hand to help guide and assist customers”.

The overall Danske Bank group reported net profit of 9.4 billion Danish Krone (£1.1bn) for the six months.

On the outcome of the EU referendum it said it "will not have any significant short-term im-pact on Danske Bank".

"Our business in Northern Ireland accounted for 3 per cent of total lending at 30 June 2016 and 5 per cent of total income in the first half of 2016.

"The outcome will probably impact economic activity in all of our markets, however. It is too early to predict the extent of the impact, but unce-tainty concerning future growth has increased," it added.

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