NIB pre-tax losses fall significantly in Q1

NATIONAL Irish Bank (NIB), which announced plans to close 25 of its 58 branches in December 2009, yesterday reported pre-tax losses fell significantly in the first quarter of 2010. In the period under review the group’s losses amounted to €133 million before tax down from €177m in the same period last year.

Operating profits for the first three months of the year fell by 38% to €13m as income fell 19% to €42m.

It blamed lower demand and lower deposit margins for the declines.

NIB, which is owned by Danish group, Danske Bank, has set aside €146m for loan impairment charges related to losses on its commercial property transactions.

The bank which operates outside the Government’s guarantee scheme, said the bad loan provisioning was down €52m on last year.

NIB chief executive Andrew Healy said economic and trading conditions continue to be very difficult as the banking sector endures a period of profound upheaval.

“While our loan impairments continue to trend downwards, they remain high. Last December we announced a major restructuring programme to reduce our costs and to reposition the bank to ensure we have a strong future in the Irish banking market of tomorrow. This programme is on track,” he said.

“Our parent, Danske Bank, is one of the best capitalised banking groups in Europe,” he said.

NIB achieved a 7% reduction in costs year on year through tight cost management. NIB’s total loan book is €10.2 billion, down 5% on last year.

Mortgages represent €3.7bn of that with loan quality remaining satisfactory, the bank said.

Another €3.3bn represents lending for commercial property with most of the bank’s loan impairment charges in this area.

Deposits increased by 21% year on year.

Last night a spokesman for the bank said since the branch closure announcement of the Irish operations was made in December that several of the branches targeted under the plan have been wound down.

Meanwhile, Danske reported first-quarter profits ahead of estimates after costs and loan losses declined, the parent group said.

Profits before tax at €187m were down 40% year on year, while income fell 30% to €1.624m.