Business

Danske Bank profits lift to £71.1m - but boss warns of 'subdued trading'

Danske Bank has increased its pre-tax profits to £71.1m in the first nine months of this year
Gary McDonald Business Editor

THE north's biggest bank increased its profits again in the first nine months of this year - despite its chief executive admitting demand for new borrowing "continues to be subdued".

Danske Bank, which employs 1,500 staff at 40 branches and business centres across Northern Ireland, saw pre-tax profits over the period lift by 6 per cent to £71.1 million.

It came on total incomes of £175.5 million, and was helped by the bank reducing its expenses to £103 million and with loans impairments down to £1.4m over the nine months compared to £3.1m in the corresponding period in 2018.

Lending was 3 per cent higher year-on-year at £5.547 billion, with retail customer activity levels remaining satisfactory.

Danske said new lending to businesses was impacted by Brexit, with some larger customers delaying investment decisions.

Customer deposits grew by 5 per cent year-on-year from £6.99 billion to £7.37 billion.

Chief executive Kevin Kingston said: “I'm pleased to report an operating profit before impairments of £72.5 million for the first nine months, and the underlying performance of the bank remains satisfactory, with lending up 3 per cent year-on-year.

“In personal banking, we continue to provide attractive mortgage packages with very competitive rates and market leading cashback offers.

“As part of our autumn mortgage campaign we announced further reductions in fixed rate mortgage products, which has led to an increase in approvals, especially in the re-mortgage switcher market.

“Indeed Danske Bank currently provides over one in four of all mortgages across Northern Ireland and our total mortgage lending is at its highest ever level.”

He added: “In business banking, demand for lending continues to be subdued as a result of uncertainty around the stretched Brexit process.

“It is important to note that our capacity to support new business lending remains strong, but current demand levels are below what we would expect in a more normalised trading environment.

“There has been a notable uplift in customer requests for support, advice and guidance from our Business Banking relationship managers – these are conversations we encourage and value.

“In the short-term, the business community awaits much-needed clarity on what the Brexit journey will look like. But the reality is, whatever shape it takes, it will only be the beginning of a new operating environment, and the process of change will be a significant factor in everybody’s lives for many years to come.”

Danske's Copenhagen-based parent company made a net profit of $450m in the third quarter, although operating expenses rose by 2 per cent due to higher compliance costs and anti-money laundering activities, mainly as a result of activities at its Estonian operation.

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