Ulster Bank in black to tune of £55m as it turns the corner
Once the weakest link in the RBS organisation, Ulster Bank has unveiled surprise profits of £55m in the first half of this year, just 12 months after posting losses of £381m.
The Ulster Bank's parent company RBS yesterday released its half-year results early, impatient to reveal "significantly stronger" results than expected.
Stagnating in the financial doldrums just last year, the 80% publicly-owned RBS results suggest Ulster Bank is on the road to recovery. The glowing report is the first time since 2009 that Ulster Bank recorded a profit outside its end-of-year margins.
The bank's improving fortunes come amid a healthy landscape for the UK economy, but which also illustrate Northern Ireland faces many challenges to keep up. Figures released yesterday by the Office for National Statistics showed that the UK's worst post-war downturn was becoming part of history after it announced growth of 0.8% in the second quarter of 2014.
The results take the size of the UK economy past its pre-recession peak by 0.2%, with the economy growing by 3.1% overall in the year to June 2014. Predictions for Northern Ireland, however, place its economic growth among the lowest of the UK regions.
Commentators may suggest the fortunes of its largest financial institution, Ulster Bank, which reports results on an all-Ireland basis, are prime among the areas which are in fact growing.
And though Ulster Bank's status has been assured within RBS, the future shape of the bank in the Republic could be as part of a possible merger, or even a sell-off, according to RBS chief Ross McEwan, who confirmed that private equity involvement was an option being explored.
"I know there's been a lot of speculation on that, and it's interesting how many people want to buy into Ireland at the moment," he said.
"Right now we're doing a lot of work inside Ulster (Bank) to see what opportunities we've got, and how that business can position itself.
"That's going reasonably well and we'll be talking more about that probably in the next two or three months."
Mr McEwan said the RBS executive team had been "buoyed" by a visit to Ireland in recent weeks and said the country's economy was "very good".
The financial institution's chief financial officer Ewen Stevenson said Ulster Bank had been making good progress in selling off property and property loans.
"People are after these assets and that has helped us," he added.
Jim Brown, Ulster Bank chief executive, said the bank was on "a solid, growing path to recovery".
"Our performance is improving across a number of metrics and we have posted a half-year adjusted profit of £69m (operating profit of £55m) – our second consecutive quarter in profit – clearly our strategy is working and we are on a solid, growing path to recovery. In Northern Ireland we are progressing the alignment of our business with the rest of the UK," he said.
"In the Republic of Ireland, any option that we may choose to take forward must bring greater benefit to our customers and shareholders than our current strategy.
"We are focused on sustaining the recovery of our business and providing the best customer service on the island of Ireland."