Business

Danske Bank’s pre-tax profit rises threefold in two years to £186m

Lender says almost half of local mortgage customers opted for a two-year fixed mortgage in 2023

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" in 2023.

The north’s biggest bank made a profit of half a million pounds a week last year, its latest results show.

Danske Bank’s business saw its profit before tax increase by 80% last year to £186 million - more than three times the figure from 2021.

And that was despite what its chief executive Vicky Davies admitted were “uncertain” conditions, and in a year when business lending actually dropped.

The full year results for the north’s biggest lender showed revenues rose 22.4% to £332.3m in 2023, in a year where the Bank of England raised interest rates from 3.5% to 5.25%.

Danske Bank said lending increased by 6% to £6.06 billion, with deposits rising by just 1% to £10.7bn.

The lender also banked an extra £13.1m in loan impairments, which it said reflected the strength of its loan portfolio.

It marked a reversal from 2022, when impairments cut around £20m out of its final profit.

Costs also increased last year by 7.5% to £159.4m, which Danske put down to inflationary pressures and continued investment .

Danske Bank UK boss Ms Davies said it provided around £550m in mortgage lending approvals in Northern Ireland during 2023, around £40m less than 2022.

The hike in mortgage rates at the start of the year resulted in a slow first quarter for home lending.

But the chief executive said transaction levels in the mortgage market “remained at healthy levels across the rest of the year”.

Danske Bank chief executive Vicky Davies
Danske Bank chief executive Vicky Davies Danske Bank UK chief executive Vicky Davies

New mortgage lending approvals in the second half of the year were 25% higher than in the first half.

But she said 47% of local mortgage customers opted for a two-year fixed mortgage in 2023, up from 27% in 2022.

“We believe [this] was an indication that more customers were anticipating rates may come down.

“Currently around 80% of all our mortgage customers hold fixed rate mortgage products, with many having not been immediately impacted by rising central bank rates in 2023.”



Business lending approvals fell by around one-third from £850m in 2022 to £575m in 2023.

But Danske Bank said lending approvals for small businesses were up 23% year-on-year, while sustainable finance lending in corporate and business banking was another growth area, with lending approvals up 46% year-on-year.

“At Danske Bank we are very aware that many customers continue to face cost of living challenges,” said Vicky Davies.

“We are staying close to our customers, providing support for those who need it, whilst continuing to help businesses pursue growth opportunities and people buy or move home.

“In 2023 we proactively outreached to over 45,000 customers offering guidance and support directly relating to their financial circumstances. Arrears levels across both our personal and business customer base remain very low.”

Danske Bank currently has 28 branches across Northern Ireland with a staff of around 1,300.