Danske Brexit warning as half year profits increase
Lending 'subdued' due to extension on UK departure
Danske Bank in Northern Ireland reiterated its call for a no-deal Brexit to be avoided as it revealed pre-tax profits of £45.9m for the first half of the year.
While pre-tax profits were up 13% on the first half of 2018, it said the “elongated” Brexit process had resulted in "subdued" lending to business.
Total income was up 1% at £117.2m compared to £116m a year earlier, while operating profit was £47.8m.
The bank said the rise in pre-tax profits was due to a fall in loan impairments, which were down from £5.8m last year to £1.9m this year.
Lending was 5% higher year on year, and personal account customer activity was “satisfactory”.
The bank said it was providing “attractive” mortgage rates, leading to home loan lending volumes hitting their highest ever level.
But new borrowing by businesses had been impacted by Brexit, with some bigger customers delaying investment decisions, the bank said. Chief executive Kevin Kingston said lending had been mainly to existing business customers who were expanding or preparing for Brexit.
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And he said it was “imperative” the UK Government concludes a deal for leaving the EU as he cited its own economic forecast, which predicts economic growth of 1% this year and 1.3% next year on the basis that a no-deal Brexit is avoided.
Mr Kingston said: “It is imperative that the Government uses the coming months to agree with the EU on an amicable resolution to the Brexit impasse. We, alongside the overwhelming majority of the business community, remain resolute in our view that a no-deal Brexit must be avoided.”
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