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Danske Bank records pre-tax profits of £81 million: Boss urges firms to borrow now to grow in the future

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Time for action: Businesses are being urged by Danske Bank to borrow funds they need for the future as soon as they can.

Time for action: Businesses are being urged by Danske Bank to borrow funds they need for the future as soon as they can.

Gerry Mallon from Danske Bank

Gerry Mallon from Danske Bank

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Time for action: Businesses are being urged by Danske Bank to borrow funds they need for the future as soon as they can.

Businesses have been urged to start borrowing again by the boss of Danske Bank after it recorded a pre-tax profit of £81m for the first nine months of 2014. As well as having to write off fewer bad loans, mainly connected to the property market crash, chief executive Gerry Mallon said that this year had been the best on record in terms of winning new business customers.

The amount of mortgages approved in the year to date also climbed by 48% despite Danske Bank only having a 6% share of the local mortgage market.

This figure comes despite the backdrop of a 14-month low in mortgage approvals by banks in Great Britain recorded in September.

Danske's profit before impairments was up 43% and total income was up 13% to £167m.

The bank also experienced higher than expected repayments generated from the sale of property and other assets held as security against impaired loans, resulting in a net recovery of £21m for the first nine months of 2014.

Mr Mallon said that as the economy recovers, the bank was eager to lend more to business customers.

"We have grown our market share but overall demand for new lending from our business customers is pretty modest," he said.

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"We see that our core customer base is not presenting us with huge demands for lending and we would rather have a few more challenges from customers looking for lending and to further grow and expand their businesses - we support anyone who has a good, sustainable ambition to grow.

"As business confidence improves, we hope to see more investment."

Economist John Simpson agreed that the lending environment needed to improve.

"We have gone through the banking crisis and one of the things that Danske Bank and others needed to do was to call in loans that were not performing," he said.

"However, there is still no sign as we enter recovery that the banks and the business community are upping the lending.

"The amount of lending outstanding is continuing to fall, it is £4.3m for the year to date, down 1% from the same period last year.

"Four or five years ago, we were talking figures of £5bn.

"For the economy to recover, businesses need to start spending.

"However, coming from a backdrop of heavy losses, the fact that Danske has been able to recover £21m shows a real sign of growth."

Danske Bank also reported that its UK-wide mobile payments service, Paym, has attracted 20,000 customers, with over £1m paid through the service.

Ulster Bank is expected to release its results today.


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