First-half profits surge at Ulster Bank

First-half operating profits at Ulster Bank surged by nearly 166%, year-on-year, to €178m, the bank said yesterday, adding that over €100m of that was earned in the second quarter of the year.

The bank— reporting as part of parent, Royal Bank of Scotland’s interim results — reported a net interest income/revenue fall of 18%, to €362m, but saw improvements in profit, cost reduction, lending, and impairments (a net impairment release of €71m, comparing to an impairment loss of €69m for the same period last year).

Ulster’s outgoing chief executive, Jim Brown said the performance was driven by “proactive debt management and improving economic conditions”, adding that the results show continued progress and a strong capital and funding position for the bank. New corporate lending was up 57%, year-on-year, while mortgage drawdowns rose 45%.

RBS posted an unexpected profit in the second quarter, benefiting from writebacks on problem loans and boosting its stock ahead of a first sale of a chunk of the UK government’s shares.

An RBS share sale, following successive disposals of British government holdings in Lloyds Banking Group, would mark another milestone in Britain’s recovery since the 2007-2009 financial crisis and could contribute billions to state coffers. Chancellor George Osborne said earlier this month the Treasury planned to sell at least three-quarters of its 78% stake over the next five years and was keen to kick off the process as soon as possible.

RBS reported a profit of £293m (€419m) for the second quarter, up 27% on the year before, as recovery at home enabled it to recover loans that had been written off. Analysts had expected a loss of £260m.

Elsewhere, it was announced yesterday that Lloyds Banking Group is to sell a portfolio of impaired Irish commercial loans to a syndicate of investors — including Bank of Ireland, Ennis Property Finance and Feniton Property Finance — for an estimated €1.2bn. The two latter firms are Irish affiliates of Goldman Sachs and private equity group, CarVal, respectively.

It is understood that Bank of Ireland will acquire €200m worth of the portfolio, with those loans covering around 650 SME and commercial real estate customers.