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Cull of branches helps keep Ulster Bank in black

By John Mulgrew

Published 01/05/2015

Ulster Bank
Ulster Bank

Ulster Bank has reined back loan impairments and lowered its staff costs to post profits of £51m for the start of 2015.

A cut in staff numbers and a boost in its lending to small and medium-sized business helped it achieve operating profits of £51m across all of its business in Ireland - a five-fold increase year-on-year.

But profits fell considerably compared with the last quarter of 2014 when they stood at £169m - fuelled by additional cash clawed back from loan impairments.

The bank has also undertaken extensive cost-cutting measures, which included a further 10 branch closures earlier this year - leaving it with around 65 here.

Ulster Bank also posted incomes of £190m for the first three months of 2015.

And it said it had boosted its business lending by 31%, with some £1.5bn being made "available for business customers in 2015".

Chief executive Jim Brown, who just this week announced he was moving on from Ulster Bank, said the latest results represented the "fifth consecutive quarter in profit".

"This quarter sees sustained progress across the key areas, demonstrating the underlying strength of the core Ulster Bank franchise," he said.

"Both loan and deposit balances were impacted by a weakened euro but were stable on a constant currency basis. There was no net impairment charge this quarter."

Speaking to the Belfast Telegraph following its annual results earlier this year, Mr Brown said he could not rule out additional job losses at the company.

But he said there were no plans in the pipeline this year for the closure of more high street branches.

Mr Brown is soon taking up the job as chief executive of Williams & Glyn - part of the RBS group - after four years with Ulster Bank. Speaking about the latest results, Mr Brown said: "Ulster Bank has increased lending to SME and corporate customers by 31% this quarter and has £1.5bn available for business customers in 2015."

Meanwhile, its taxpayer-backed parent company, Royal Bank of Scotland (RBS) warned of another tough year as misconduct and restructuring charges totalling more than £1bn saw it slump to a £446m loss for the first quarter.

The lender, which is 80% state-owned, went into the red as it set aside hundreds of millions of pounds to settle a US investigation over the foreign exchange rigging scandal as well as other past misconduct.

Chief executive Ross McEwan said underlying performance was good, with operating profit stripping out one-off charges up 16% to £1.63bn.

But he said: "There are still many conduct and litigation hurdles looming on the horizon. We look forward to the day we can focus entirely on the future rather than dealing with legacy issues."

RBS has been shrinking its investment bank, pulling out of many countries where it operates, as the group seeks to focus on its core UK business.

The ongoing disposal of its US bank Citizens, as well as a write-off on the sale of the international arm of private bank Coutts, weighed on first quarter profits.


The amount of profits posted by Ulster Bank for business in Ireland

Belfast Telegraph

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