NIB loss blamed on exceptional items

NATIONAL Irish Bank (NIB) had exceptional items to blame for a €3 million pre-tax loss in the nine months to September, the bank’s new Danish parent said yesterday.

But NIB made profits of €17m during the period before taking a €20m once-off hit from costs associated with the takeover by Danske Bank, which was completed in February this year.

Lending volumes soared 36% on the same period last year, with business lending ahead by 43% and loans to personal customers up by 26%. Danske, which reported a 44% hike in pre-tax profits of nine billion Danish Krone (€1.2 billion) yesterday, said NIB’s business banking units had outperformed the market and had taken market share from rivals, but that growth in retail lending was only in line with other banks.

Deposits from business customers were 42% higher year-on-year but there was less impressive growth on the retail side, where growth of just 9% was recorded. Danske chairman Peter Straarup upgraded the bank’s full-year forecasts and said its integration of NIB and Northern Bank, its sister bank in the North, was progressing according to plan.

“The development of banking activities in the Republic of Ireland and Northern Ireland is in line with expectations and the IT integration is progressing as planned,” he said.

Northern Bank delivered pre-tax profits of €10m in the nine-month period.

The bottom line suffered from exceptional items of around €57m, however. Overall lending growth was more modest than NIB’s at 11%, with personal and business lending growth broadly similar. Deposits were ahead by more than 10%.

Danske was upbeat about its Irish operations and said it had put in place detailed financial plans for the next three years that were based on new products and new pricing strategies.

“The plans reflect the expected synergies at the time of the acquisition and support the growth ambitions of the two banks,” Danske said.

The bank also said it had struck a deal with the IBOA, the bank workers union, to provide broadband-enabled computers to staff members in their homes. This would facilitate electronic learning programmes delivered outside normal working hours, it said.