Pre-tax profits fall by 65 per cent within Ulster Bank's operation in the north
PRE-TAX profits at Ulster Bank fell by 65 per cent during 2019.
Despite an increase in turnover during the 12 months, the lender announced on Friday that it finished 2019 with £18m profit before tax.
It compares with £51m pre-tax profits recorded in 2018 and £59m in 2017.
Ulster Bank said the £18m to the end of December 2019 reflected the majority, but not all of the profits generated in Northern Ireland by its parent group, RBS.
The lender put the slump in profits down to a significant investment in a multi-million pound refurbishment of its Belfast headquarters, which has created around 100 contact centre jobs.
It also invested heavily in relocating the Ulster Bank Entrepreneur Accelerator into its Donegall Square East headquarters.
One-off costs associated with a voluntary refund of interest to some business customers also impacted on profitability, the bank confirmed.
Ulster Bank claimed its underlying performance remained “solid in a challenging environment”, adding that its investments put it on a strong footing to continue to deliver for customers.
The bank's total income in Northern Ireland for 2019 was £189m, against operating costs of £153m.
Profits before impairments and tax stood at £36m.
The results released on Friday are the first since Mark Crimmins took over as the head of its operation in the north during July.
Speaking on Friday, he said: “This has been a solid year for Ulster Bank in Northern Ireland, with a strong underlying business performance allied to significant and visible investment in the bank to enable us to provide even-better service to our customers.
“Despite a challenging external environment and subdued borrowing appetite from businesses, we increased Corporate lending in 2019 by 12 per cent and saw an eight 8 per cent increase in small business drawdowns.
“Supporting customers to own their own home also continues to be a strong priority for Ulster Bank, and in 2019, for instance, we opened more than 10,000 Help to Buy Isas to help customers save for a deposit.”
Meanwhile, the new chief executive of RBS, Alison Rose, used Friday's presentation of the bank's annual report to announce a major group rebrand.
The Royal Bank of Scotland will change its name to NatWest Group plc under the move.
Bosses said the move was because 80 per cent of customers bank with the NatWest brand, rather than through RBS branches, adding that it will have no impact on customers or staff.
It brings to an end a name that has been in existence since the bank's foundation in 1727.
Chairman Howard Davies explained: "The essential reason for this is as the bank has evolved from the financial crisis and the bailout, we have focused on the NatWest brand.
"We have exited a lot of the international business which were not profitable. That was branded RBS and that's gone.
"It really makes no sense for us to continue to be called RBS. It was designed for a global group of brands, which we no longer are."
He added the registered office will remain in Edinburgh, with no plans for "unscrewing any brass plaques at this point".
Although a second independence referendum in Scotland could change this, he said.
The decision comes as Ms Rose unveiled a 5p-a-share special dividend, although the full-year dividend was cut from 3.5p to 3p.
It means the bank's biggest shareholder - the Government - will receive a payout of nearly £600m.
With the interim dividend paid out earlier this year, it means the taxpayer has been handed £1.7bn so far this year.
Making the payment is possible because the bank managed to hit an operating profit before tax of £4.2bn - up 26% from £3.4bn in 2018.
The results were boosted by the merger of Alawwal Bank and the Saudi British Bank, in which RBS had a stake, but was knocked by an extra £90 m in PPI payments.
Ms Rose also announced cost cuts of £250m, following the closure of 215 branches over the year.