Posted on Friday 3 May 2013 by Ulster Business
The Royal Bank of Scotland Group, which is currently 82% owned by the taxpayer following a bail out during the financial crisis, made a pre-tax profit of £826m in the quarter, compared with a £1.5bn loss in the first quarter of 2012 and a £2.2bn loss in the final three months of last year.
Chairman Sir Philip Hampton also said in a video statement on the company's website that he expected the bank to return to private ownership in the next year.
RBS said the improved performance at Ulster Bank was driven by a 39% reduction in impairment losses, which decreased to £240m from £394m in the same period of 2012.
The bank said deposits increased by 8% during the three month period, largely driven by retail and SME balances. But total income was down by £6m compared with the first quarter a year earlier, which Ulster Bank attributed to the high cost of deposit raising and lower interest-earning loan volumes.
Chief Executive Jim Brown said in a statement: "As the economic environment stabilises, Ulster Bank continues to make good progress on the restructuring of its core bank, with a significant decrease in operating and impairment losses, an increase in customer deposits, an improvement in the loan to deposit ratio and a stable Net Interest Margin."
The reduction in losses from bad loans was mainly due to a reduction in impaired mortgages, which he said reflected an improvement in the performance of "underlying credit metrics and macroeconomic conditions" in the Republic of Ireland.
The bank said it had "continued to work with customers in arrears to find sustainable solutions" and that "significant investment was made in specialist resourcing to support customers in financial difficulty".
Mr Brown added: "We continue to remain focused on the recovery of our business – supporting the communities in which we operate and serving the needs of our 1.9 million customers across the island of Ireland."