Danske Bank cuts Q1 losses 41%

Danske Bank has expressed confidence in its ability to grow its re-branded offering in Ireland, after seeing its operations here cut first-quarter losses by 41% and impairment charges by 65%.

Figures published yesterday show that Danske Bank Ireland — which ditched the National Irish Bank name at the end of last year — made pre-tax losses of €8.8m in the first three months of this year. That was 41% down on the fourth quarter of 2012, which saw a loss of €15m generated.

Impairment charges — to cover bad loans — amounted to €5.5m; down by 65% on the €15.7m put aside in the preceding three-month period.

According to Terry Browne — Danske’s country manager for Ireland — the first quarter results “reflect the performance of the re-branded core business”, which encompasses personal banking, business banking and corporate/institutions.

“As the economy stabilises, the focus for the business is to build the Danske Bank brand in Ireland as a provider of specialist advisory services supported by market leading technology driven products, particularly for corporate and private customers. Recent business wins, in both segments, confirm the opportunity for the brand in Ireland,” Mr Browne added.

Total income — on a quarter-by-quarter basis — rose slightly from €14.5m to €14.6m, but included a 12% increase in non-interest income. Danske Ireland’s total loan book value declined marginally to €3.2bn; while customer deposits rose by 12% on the previous three months to €3.4bn. The rises in both deposits and non-interest income were boosted by business wins for the bank’s corporate/institutional units.

First quarter losses — before impairment charges — amounted to €3.3m, compared to a small profit of €700,000 in the previous quarter, and the first three months of 2013 also saw a rise in operating costs from €13.8m to €17.9m.

According to Mr Browne: “The bank’s overall performance was in line with expectations — given the continuing low growth and low interest rate environment. While costs remain elevated, the underlying costs trend is moving in the right direction, as is the case with impairments which continue their downward trajectory as previously guided.”