Pre-tax profits fall at Danske Bank in otherwise 'strong' start to 2018
PRE-tax profits at Danske Bank in Northern Ireland have fallen by almost 30 per cent in the first half of the year, according to its latest accounts.
The financial results, which cover the six months up to end of June reveal pre-tax profits of £40.6 million, a 29 per cent drop from the £57.7m recorded in the same period last year. Danske cite loan impairment charges for the dramatic slump in profits in an otherwise "strong" performance.
Total income in the first six months of the year grew by 2 per cent to £116m in comparison to the £113.5 recorded in 2017, while a combination of higher income and lower costs saw the bank's operating profit (profit before impairments) increase by over 9 per cent from £42.5m to 46.5m.
Total lending was also up by 9 per cent year-on-year from £4.8m to £5.2m, while deposits rose by 11 per cent from £6.4m to £7.1m.
Danske Bank UK CEO, Kevin Kingston said the underlying performance of the bank "remains strong" and highlighted successes across the board.
“Last year was a record year in terms of mortgage lending, and the upward trajectory has continued in the first six months of 2018 – with new mortgage lending up 28 per cent year-on-year", he said.
"Latest market data indicates that we are now funding one in four of all first time buyer mortgages across Northern Ireland."
“In Business Banking new lending is up 19 per cent year-on-year, as we continue to further strengthen our leading market share in the corporate and business segment. Notable deals included funding support in Belfast for Andras Hotel Group's new £12m ‘Hampton by Hilton' nine-story hotel and their £5m 60-bedroom extension at the Holiday Inn Express, as well as support to cloud provider Novosco, who through ongoing expansion are aiming to create 150 new jobs," he said.
Mr Kingston further noted investment at the bank, including plans announced in June to open up the ground floor of its Belfast head office at Donegall Square West for use by fintech entrepreneurs. Working with not-for-profit tech organisation Catalyst Inc, the new co-working space, due to open in September, will include 70 permanent and hot desks, a social meeting area and an event space that can seat around 50 people.
“We want to see the fintech sector grow in Northern Ireland and we want to put Belfast on the global map as a fintech hub. We believe, as Northern Ireland's biggest bank, that we have a key role to play in making this happen," Mr Kingston added.
Meanwhile Danske Bank's parent company in Copenhagen posted a profit of DKK 9.1 billion (£1.1bn) - a12 per cent fall from the level in the first half of 2017. Total income also decreased by 8 per cent to DKK 22.3bn (£2.7bn), with a decline in net trading income mainly to blame.