The chief executive of Danske Bank in Northern Ireland said it should return to profit in 2015 after heavy losses in the downturn.
Gerry Mallon (below) spoke as the institution formerly known as Northern Bank unveiled a £92.1m loss in its full-year results up to December 31 2012 – down from £216.6m in the year before.
Profits before impairments were £64.8m, up 69% from £38.3m. Impairment charges – the sums set aside to make up for bad debts – also improved as they fell by 38% from £254.9m to £156.9m.
Mr Mallon, who heads up Dankse Bank in the UK and Ireland, said bank management could not take credit for falling impairments, which were due to the overall environment. But he added: "Underlying profitability is something we have been working on restoring and have made excellent progress in the course of the year."
While the 2013 outlook for the economy in Northern Ireland "does not look overly optimistic", Mr Mallon said things were going in the right direction for Danske Bank.
"By 2015 I would be comfortable that we will see higher profitability than impairments," he said. He added he believed land and property values – the collapse of which accounts for the majority impairments of Danske and other banks – had bottomed out. "We are closer to the upturn than we are to further downturn," Mr Mallon said.
The popularity of electronic methods of banking was also growing among customers.
Mr Mallon said the gradual closure of bank branches would continue, drawing a parallel between changes affecting other former stalwarts of the high street, such as entertainment chain HMV and camera shop Jessops, which were losing ground to the online model.
Similarly, banks were closing branches to reflect the growing popularity of online banking –though some branches would be retained.
"Jessops and HMV were victims not of the recession but an outdated business model," he said. "It's a trend that you will see across the [banking] industry."
He said the bank had spent "a few million" on Northern's rebrand last year to Danske Bank, the name of its Danish parent, as part of an overhaul.
New notes with Dankse branding would be introduced in the province in May or so – but Mr Mallon said that would not entail any additional costs as new notes were routinely produced.
He said they would have the same features, such as the Northern Ireland inventor series, as Northern Bank notes. The number of branches has fallen from 88 in 2009 to 62 this year.