Danske Bank's nine month pre-tax profit up 91% to £152m for Belfast-based lending business

Danske Bank UK's chief executive Vicky Davies (inset) said the lender had recorded "a strong set of results" for 2023 to date.
Danske Bank UK's chief executive Vicky Davies (inset) said the lender had recorded "a strong set of results" for 2023 to date.

DANSKE Bank’s Belfast-based business has recorded a pre-tax profit of £152.2 million for the first nine months of 2023.

The latest financial results from the lender confirmed the higher UK interest rate environment is continuing to drive bank profits.

Danske Bank posted a 91% year-on-year increase on the £79.6m profit before tax it recorded in the same three quarters last year.

Income climbed to £254.5m in the first three quarters of the year, £63.1m more than the 2022 equivalent period.

Danske Bank said the performance was down to lending growth, higher UK interest rates and transactional activity.

While lending was 4% up year-on-year, reaching £5.93 billion in the first nine months of the year, deposits were 2% down on last year.

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Danske Bank said while deposits fell year-on-year, the £10.5bn total it recorded in the first three quarters was 39% higher than pre-pandemic levels.

The lender’s latest mortgage data also suggests little sign of an impending slump in the housing market. 

Danske said mortgage lending approvals increased by 35% between the second and third quarters of the year.

But reflecting the temperamental interest rate environment, most new mortgage customers opted for a two-year fixed product, a change from last year, when five-year fixed products were much more popular.

“Despite rising interest rates, mortgage lending has remained resilient and been supported by low unemployment,” said Danske Bank UK’s chief executive, Vicky Davies.

The strength of its loan book saw the Belfast-based lender register an additional £13.8m in impairments for the year to date, a reversal of 2022, when it took a £4.2m impairment loss.

Turning to the cost crisis, the Vicky Davies said: “The vast majority of customers are managing to prioritise the repayment of loans, but we are being proactive and reaching out to customers on variable rates, tracker products, interest only and those we have identified as being most likely to potentially struggle with higher payments. 

“Our advice to both personal and business customers worried about affordability is to always contact us at the earliest possible opportunity. 

“We will take an empathetic and supportive approach, with a range of tailored forbearance options in place to meet their individual circumstances. 

“Overall lending arrears levels across the Bank remain very low.”

Elsewhere, Danske Bank said business lending approvals totalled £450m in the first nine months of 2023.

It included the finance for Belfast Harbour, Belfast International Airport, and Killahoey Ltd, aiding its acquisition of Rushmere Shopping Centre in Craigavon.

The bank said it’s now recording over seven million customer log ins per month to its digital channels.

Danske said there had been a 25% increase in digital banking activity over the past two years.