Danske Bank 'performing well' despite 12% profits drop in Northern Ireland
Danske Bank in Northern Ireland has said its underlying business here is performing well, despite a 12% fall in pre-tax profits for the first six months of the year.
The bank said the low interest-rate environment - the Bank of England base rate is 0.25% - was continuing to weigh heavily on its operations.
But total income for the first six months of the year was down only 0.35%, from £112.7m to £112.3m.
Restructuring had also led to higher expenses - which were up 10% to £71m.
Like its rivals, Danske Bank has closed a large number of branches around Northern Ireland in response to the growing use of online banking.
It most recently brought the shutters down at Antrim Road and Connswater in Belfast.
It now has 44 branches and three regional business centres in the province employing around 1,267 people - compared to 83 branches around seven years ago.
However, the continued recovery in the Northern Ireland property market did buoy up its results and was reflected in a fall in loan impairments from £16.5m to £15.2m.
New mortgage lending for the bank was also up 7% year on year. Deposits also grew from £6bn to £6.37bn, while loans had increased from £4.4m to £4.7m.
And Danske said a "strong capacity to support new lending" was demonstrated in a loan to deposit ratio of 74%.
It said it was also doing more to support small business customers by "decentralising" small business advisers and moving them out into branches.
Chief executive Kevin Kingston said: "I am pleased to report a healthy profit before tax of £56.5m for the first half of 2017.
"The underlying performance of the bank remains strong, with lending up 8% year-on-year."
He said 2016 had been a "record year" for its mortgage business and that the growth in the segment had continued, with mortgage lending up by 7%.
The bank is now offering Apple Pay - allowing bank customers to pay for goods using their Apple devices - which Mr Kingston said had proved a "great addition" to its digital banking.
And moving small business advisers out into branches had helped drive an increase of nearly one-third of lending to the segment, Danske reported.
Lending also increased to medium to larger-sized businesses, up 9% on the same period in 2016.
But Mr Kingston added: "Despite improved business activity across the bank, total income has remained broadly flat compared to the first half of 2016, as low interest rates continue to impede our income growth."
The Danish-owned bank has taken measures to raise revenues at its Northern Ireland operations, including letting out a floor of its Donegall Square headquarters, and selling off its wealth management business to Davy Stockbrokers.
But it said that strong growth in customer lending and deposit volumes showed that its underlying business was performing well.
Parent Danske Bank reported a 10% increase in net profits to DKK 10.3bn (£1.24bn).