NIB profits hit €21m as lending rises

HIGHER lending drove profits at National Irish Bank up to €21 million in the first nine months of the year.

The bank, which is owned by Danish financial group Danske, said the growth in profits came as total lending rose by 43%.

Mortgage lending was ahead by 45% on the backof the popularity of its loan-to-value (LTV) product.

The LTV mortgage applies different interest rates to home loans depending on the value of the house.

Net interest income rose to €117m from €88m.

The €21m profit for nine months to end September compares to a loss of €4m in the corresponding period in 2006. However, profits in 2006 were affected by significant costs associated with NIB’s changeover to Danske’s IT platform.

“We’re progressing well. These results show continued momentum in all areas of our business,” said NIB chief executive Andrew Healy.

“I’m particularly pleased with the level of new business we’re winning in both personal and business banking.”

Lending rose from €6.2 billion to €9bn. The bank said it had approved €2bn in LTV mortgages since the product was launched less than a year ago.

“These results underline the impact the LTV Mortgage is continuing to have in the Irish market. Recent market turbulence has underlined the importance of shopping around for the best long term value in mortgage products. The Irish homeowner has felt the impact of eight successive ECB rate increases,” said Mr Healy.

“We estimate that over 500,000 mortgage holders could save up to €450m by unlocking the value of their homes.”

The bank also reported strong growth in business lending, which was up 44% thanks to new customer wins such as the Department of Finance’s cash management business.

The bank said customer deposits rose by 18% year-on-year to €3.1bn.

Non-interest income increased by 33%, reflecting strong results in wealth management products including the bank’s online share trading product and in cash management solutions to business customers.

NIB’s cost to income ratio fell to 61% from 76.1% in September 2006. The bank said the fall was driven by strong income growth and keeping expenses growth to 6%.

NIB said it plans to add to its 61 branches in the next few weeks with new openings planned for Dublin, Galway and Ballincollig, Co Cork.

Danske’s overall profits for the nine months increased by 11% to €2bn as net interest income rose 11%.