Danske Bank boosts business lending but suffers 30% profit dip
Danske Bank has significantly increased loans to new businesses in the past six months, according its latest financial results.
The Danish company said its business end increased new lending in Northern Ireland by 19% in the first half of 2018, with notable deals including £12m for the new 'Hampton by Hilton' hotel in Belfast.
Despite increasing its operating profits from £42.5m to £46.5m year-on-year (9%), loan impairment ate into the bank's final figure.
A loan is considered to be impaired when it is probable that not all of the related principal and interest payments will be collected.
The figure was exacerbated by the fact that the lender reported net recoveries in loan impairment in recent years.
The result was a 30% fall in pre-tax profit from £57.7m in the first half of 2017 to £40.6m during the same period this year.
According to the Belfast Telegraph's list of top 100 companies, Danske Bank has been Northern Ireland's most profitable company for the past four years.
Yesterday's report showed that it increased its total income by £2.5m year-on-year from £113.5m to £116m. It also cut costs from £71m to £69.5m.
Just last month Danske Bank announced its plans to shut branches in Larne and Ballynahinch from October.
It will leave the lender with just 42 outlets in Northern Ireland, bringing to 40 the number of branches withdrawn over the past eight years.
The bank's chief executive in the UK, Kevin Kingston, said: "The underlying performance of the bank remains strong, with lending up 9% year-on-year."
He said initiatives encouraging people to switch their loans had contributed to a 28% year-on-year rise in new mortgage lending.
Commenting on the 19% year-on-year increase in new lending in its business banking wing, Mr Kingston said notable projects supported by Danske Bank included the Andras Hotel Group's £5m expansion at the Holiday Inn Express in Belfast.
The bank also assisted cloud provider Novosco, which is aiming to create 150 new jobs here through ongoing expansion.