Posted on Thursday 6 February 2014 by Ulster Business

Danske Bank  003

Danske Bank's Northern Ireland operation has recorded its first full year profit since the start of the financial crisis.

The Danish-owned bank posted pre-tax profit of £11.4m for 2013, which compared with a loss of £58.3m for the previous year. The results confirmed that the bank was made a profit in each of the final three quarters of the year.

Danske attributed the return to profit to a reduction in the number of bad loans on its books as well as an improvement in its underlying business, particularly in business banking.

Loan impairment charges for the year remained high at £47.5m but this was a substantial drop from the £152.7m in bad loans which dragged the bank's results into the red in 2012.

Although the bank's overall lending volumes fell by 2%, deposit balances were 9% higher than the same period a year earlier.

Commenting on the results, Danske Bank UK CEO Gerry Mallon said the bank had started 2014 in a "strong position from which to deliver future growth" as the economy recovers.

"A substantial fall in impairments coupled with a strong focus on the fundamentals of our business resulted in a return to profit last year, our first profitable year since the start of the financial crisis.

"A continued focus on developing our products and services to meet customers' needs coupled with our appetite and capacity to lend has resulted in a strong business performance," he said.

Mr Mallon said the bank had lent £450m to business customers, a 50% increase on the year before. Around half of that growth was down to "new to bank" customers attracted from other banks, he said.

"Business banking continues to go from strength to strength. In 2013 even more good trading businesses moved to Danske Bank with the level of new customer acquisition amongst the highest levels seen in recent years," he said.

The CEO also indicated that its programme of branch closures is likely to continue.

"The changing habits and expectations of consumers continued to drive changes to the branch network and sustained investment in digital banking channels. The uptake of our banking apps over the past year has been phenomenal with over two million logons to our online services now recorded every month. This record growth is clearly demonstrating the increasing demand from customers for more convenient ways to conduct their day-to-day business," he said.

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