Ulster Bank operating loss up to €988m

Ulster Bank’s operating loss for the first nine months of 2012 was £797m (€988m) compared with a loss of £751m for the same period in 2011.

The operating loss for the third quarter ending Sept 2012 was £242m, which was a marginal improvement on the operating loss of £245m at the end of the second quarter this year, but well above the £208m third quarter loss posted in 2011.

It has been an extremely challenging year for Ulster Bank. During the summer, a technology malfunction at the bank caused widespread disruption to its services.

Moreover, its parent company, Royal Bank of Scotland, which is 82% owned by the British taxpayer, reported a £1.3bn loss for the three months to the end of September. It had to set aside £400m for the mis-selling of payment protection insurance policies, which brings the cost so far to £1.7bn.

Ulster Bank was heavily exposed to the Irish property and mortgage markets and RBS has had to pump close to £15bn into the bank since 2008 to cover losses.

Ulster Bank chief executive Jim Browne said: “The market remains difficult and we continue to see an elevated level of mortgage arrears.

“We also continue to actively encourage our customers to contact us if they have any concerns about their financial health or are experiencing financial difficulty. We continue to remain focused on the recovery of our business, supporting the communities in which we operate and serving the needs of our 1.9m customers across the island of Ireland.”

Total income was down from £721m over the first nine months of 2011 to £633m for the same period this year.

Impairments across the mortgage book rose from £437m in 2011 to £511 this year. However, impairments in the property loan-book eased from £241m last year to £207m in 2012.

The mortgage book shrank from £20bn at the end of Sept 2011 to £18.9bn at the end of Sept 2012.

The overall loan-book was down from £34.1bn in 2011 to £32.2bn in 2012.

Customer deposits were £20.3bn at the end of September compared with £21.8bn a year earlier.

“Customer deposits remained flat on a constant currency basis, with no significant outflows following the group technology incident, while retail and SME balances increased marginally in the quarter,” the bank said in a statement.