Danske rallies as mortgage approvals soar 50%
Turnaround hailed as very good news for our economy
NEW business customers flocked to Danske Bank at the highest rate ever seen while mortgage approvals grew 50% over the first three months of 2014, according to the latest set of results from the institution.
Danske Bank in Northern Ireland announced a pre-tax profit of £17.2m over the quarter, compared to a loss of £1m in the same three-month period in 2013 – marking the fourth profitable quarter in a row.
Total income is also up 13% on last year, with the bank's chief saying that their improving performance heralded a "very positive" 2014 for the economy.
Danske Bank UK chief executive Gerry Mallon said that there had also been a big decrease in the amount put aside to cover bad loans after writing down its property portfolio.
"We are very happy with the group results and the Northern Ireland results," he said.
"We have made a significant turnaround from quite large losses to respectable profit, driven by improvement in underlying profitability and a very large fall in impairment charges to less than £3m from more than £16m.
"During 2013, we made some conservative and aggressive write-downs on our property portfolio and that has also driven improvements in our performance, with an improved property market only adding to that. There has been a marked improvement in consumer and business confidence, meaning a stabilisation in demand for loans, in mortgages and in business lending.
"We are also enjoying increased market share, winning new customers, particularly in business banking – this quarter has attracted the highest level of new customers we can remember seeing. While we are in a period of economic growth, businesses will still be finding the going challenging, but we expect momentum to pick up even further.
"Northern Ireland's economic recovery has been slower than the rest of the UK but our first quarter profitability is heralding good signs of a very positive 2014."
Mr Mallon said that the bank's withdrawal from some markets in the Republic of Ireland had also had an impact on performance.
The Danish group announced last year that it planned to close its "unprofitable" personal and business banking operations in the Republic in the first half of 2014, and has already begun the process. Earlier this week, rating agency Standard & Poor upgraded Danske and one other bank while downgrading a further 15, citing the bank's efforts to wind down its business in Ireland and improvements in its loan book.
Mr Mallon added: "I think the progress made in winding up the non-core portfolio in Ireland added some stability to the results and I think that it has been generally well received by the investor community."
Meanwhile, parent company Danske Bank posted a pre-tax profit of DKK4.3bn (£469m).
Chief executive Thomas F Borgen said the financial performance was "encouraging" but that income – up 3% to DKK10.3bn (£1.13bn) – was still challenged by subdued economic activity.
The pre-tax profits announced by Danske's parent company