Belfast Telegraph

Northern Bank results confirm improved trading conditions

Company Report

Northern Bank now trades as Danske Bank here and is a wholly owned subsidiary of the Danish bank of the same name.

The bank has been trading in the unusual circumstances of the financial crisis which erupted in 2007.

To ease financial management Northern Bank benefited from major injections of new capital from its parent company. In 2009 and 2010 new shares were issued and effectively added just over £200m in each year to the value of shareholders’ funds. Then in 2011 new share issues, at a premium, raised £173m, and this was followed by another £77m in 2012.

Now, the results in 2016 confirm the sharply improved trading conditions in the last three years. The accounts show continuing credits resulting from the reversal of some of the bad debt provisions made after the fall in value of property loans. The bank allocated to the parent group shareholder dividends of £200m.

The key performance indicators for the bank in the last five to six years have been the end of large provisions for bad debts and, as impairment provisions have been reversed, operating profits have improved and pre-tax profits handsomely increased.

The bank is reporting an increase in lending to customers, up by 17% in the last four years to nearly £5.1bn. The lending increase has been more than matched by the increased level of customer deposits now held: up by 37% in the last four years to £6.8bn.

Employment has fallen from 1,500 employees in 2012 to an average of 1,267. In the years up to 2010 the bank was trading with a loans to deposits ratio of over 100%. Earlier this decade that began to fall. At the end of 2016 the ratio has fallen to 75%.

Belfast Telegraph Digital