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Danske Bank sees profits rise amid Brexit uncertainty

By John Mulgrew

Published 22/07/2016

Danske Bank says, while there remains business uncertainty post-Brexit vote, it is still in a
Danske Bank says, while there remains business uncertainty post-Brexit vote, it is still in a "strong position" after posting fresh half-year profits of £64.5m

Danske Bank says, while there remains business uncertainty post-Brexit vote, it is still in a "strong position" after posting fresh half-year profits of £64.5m.

Speaking to the Belfast Telegraph after the bank posted a pre-tax profit of £64.5m, its chief financial officer, Stephen Matchett, said business customers had put off or delayed investment in the run-up to the EU referendum.

"In the period leading to the date, there was a level of uncertainty," he said.

"Through that period, customers would be telling us, they were reacting to that uncertainty - that there were some potential delays, in terms of investment decisions and the corporate market didn't show appetite for growth.

"As we look post-Brexit, there is still a level of uncertainty."

The bank saw a small slip in profits, based on the same period last year.

But the profits reduced their dependency on writebacks - additional cash clawed back from loan impairments - falling to £16.5m from £22.5m.

Loan values remained roughly in line with the same period a year earlier, sitting at £4.42bn.

And deposit values increased by 8% to just over £6bn.

The bank said new business lending was also up 40% in the last year.

Danske Bank's chief executive in Northern Ireland, Kevin Kingston, said that the "underlying performance of the bank continues to improve, while at the same time impairments continue to fall".

"Operating profit is up 13% on last year and our cost base is lower as a result of a tight control on expenditure," he said.

"In personal banking we continue to focus on our mortgage business where we have enjoyed a very strong performance so far this year."

Asked whether the bank is concerned about the impact of the Brexit vote on business, Mr Matchett said: "I think that we are at that stage, seeing volatility in exchange rates. Longer term impacts are not known, and we have no hard data.

"I think for reasons around the strength of the economy, we are well positioned, but there is that uncertainty."

Speaking about the business's overall performance, he said there was a boost in personal banking, including mortgages.

"The core line is very much the operating profit, before impairment (£48m)," he added.

"In the operating profit, in personal banking, a big focus has been in mortgages."

And selling mortgages through brokers across Northern Ireland has meant a nine-fold increase via those channels in the last year.

Mr Matchett said he would concur with the recent economic downgrading of Northern Ireland's economy by PwC.

He said indicators "show that uncertainty around the EU referendum outcome is impacting upon general business confidence" but companies are "well used to dealing with challenges and change".

Belfast Telegraph

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