Ulster Bank profits jump by 12% to €406m

ULSTER BANK profits rose to €406 million last year, according to results from parent company Royal Bank of Scotland.

Ulster, the third-largest bank in Ireland, said profits here were ahead by 12%. Total income was up to €863 million from €773m in 2002 driven by strong mortgage lending ahead by 43% and customer loans. Net interest income rose from €589m, a 16% rise.

Chief executive Cormac McCarthy said the results were evidence that its new operating model has delivered real volume growth, during a period of generally moderate economic activity.

"Average customer lending increased by 26% and deposits by 13%. Mortgage lending increased by 43% and was one of the great success stories of 2003, reflecting an increase in market share in the Republic of Ireland. Cost/income ratio improved to 47.5%," he said in a statement.

"This performance, together with the recently completed acquisition of First Active plc, provide the enlarged Ulster Bank Group with an exciting opportunity and a strong platform from which we can drive the business forward to greater success in the future."

Ulster Bank saw strong growth in customer lending, which was up 26% to €15 billion, while deposits grew by €1.49bn to €8.9bn, helped by a 36,000 rise in its customer base. However, uncertainty in equity markets hit brokerage fees in the stockbroking business.

Expenses were up 9%, reflecting the annual pay award and the additional costs to support increased business volumes.

The figures do not include the First Active business and RBOS did not provide them. The Royal Bank of Scotland posted record annual profits of £7.15 billion in the year to December 31, the 10th consecutive year of double-digit growth.

The bank benefited from strong income growth, improved efficiency and a stable credit environment.

Total income rose 14% to £19.22 billion last year despite a series of "adverse external factors" including the impact of a competition inquiry into small business banking in Britain and the decline of the US dollar. The group saw a 3% increase in the number of personal customers.