Northern Bank today announced a doubling of pre-tax profits for the first nine months of the year and proclaimed itself to be “a safe, low risk bank”.
Northern said that with the strength of its Danish parent Danske behind it, there had been no need for it to avail of state support.
The figures to the end of September showed that Northern’s pre-tax profit had risen from £13m to £28m.
But loan impairment charges — bad debt — was up from £2m last year to £24m this time round, something the bank blamed on the economic slowdown.
Northern said net interest income was down from £125m to £122m and said this was due to “intense price competition and falling interest rates”.
Gerry Mallon, Northern’s recently appointed chief executive officer, said total commercial lending was up by 11% while deposits remained stable.
He said the bank’s operating expenses had fallen by 28% year on year, resulting in a “significantly improved” cost/income ratio.
“The efficiencies that we have put in place since becoming part of Danske Bank Group in 2005 have resulted in a lower cost base. Despite challenging times in the global economy and markets, Northern Bank is still very much open for business and confident of the competitive consumer choice and service that we offer.”
Mr Mallon said mortgages were up by 10% despite the fact that the market was continuing to experience a slowdown.
He said the number of personal customers was increasing, with growth being “maintained” in the business market “through prudent commercial lending”.
“More and more customers are actively using self- service channels such as eBanking and business eBanking, including cash management, which frees staff to spend more time face to face with customers.”
Commenting on bad debt provision, Mr Mallon said: “Not surprisingly, the global financial crisis is reflected in our bad debt provision and these results show prudent provision for potential losses.
“Together with the strength of Danske Bank Group behind us, these results should give customers confidence that Northern Bank has consistently applied sound and secure banking practices, remains a safe, low risk bank for their deposits and can meet the needs of customers even in the most challenging times.”
Danske Bank itself reported a net profit of €929m for the first nine months of the year, down by 39% on the same period last year. It said the results had been “severely adversely affected by the extreme turbulence in the capital markets and the general economic slowdown”, and warned that the outlook for the rest of the year was the same.