Ulster Bank chief executive Jane Howard said house prices will not crash in the Republic if Britain were to quit the EU without a deal at Halloween and that the bank was seeing no evidence of a loans slowdown.
She was speaking after Ulster Bank in the Republic unveiled “a modest profit” of €26m in the first six months after it had grown lending of both mortgages and corporate loans and had made moves to further strengthen its balance sheet and to reduce the burden of non-performing loans on its balance sheet.
The bank was boosted by impairment write-backs of €24m, which generally reflect the continuing improvement in the economy and house prices, although they were lower than the €30m in write-backs posted in the same period in 2018.
Ms Howard said the earnings at the half-way stage were “good progress and on plan”.
Asked if a crash-out Brexit at Halloween would lead to house prices dropping too, she said that house prices in the Republic were supported by a strong economy and by people relocating from overseas.
There was no evidence from economists to suggest house prices would auotomaticaly decline here under the worst-case Brexit outcome.
She also said there were no signs of weakening loan demand in the Republic in recent weeks as Boris Johnson took over as British prime minister.
Ulster Bank had prepared for the possibility of a hard Brexit and continued to talk to customers about their preparations, Ms Howard said.
Apart from Brexit, she said customers were expressing concerns about their problems in recruiting staff amid skills shortages and low rate of unemployment in a buoyant Irish economy.
“We might see a change, but we haven’t seen it yet,” she said, referring to any signs of loan demand faltering.
The chief executive said the bank was on target to reduce its ratio of non-performing loans to 5% next year.
It currently has about 10% of its loan book which is non-performing.
The bank was striking sustainable agreements with customers over soured loans as the economy continues to perform and no further loan sales were automatically required for it to achieve the 5% target, the bank said.
However, further reducing non-performing loans to below 5% would require further consideration of the options, the bank said.
The bank said that an anticipated fine from the Central Bank for its part in the tracker mortgage scandal will be covered by the €312m it has already set aside to cover all its costs for redress and compensation for 5,500 of its affected customers.