NIB deposits grow by €1.8bn in 3 months

CUSTOMER deposits at the foreign-owned National Irish Bank (NIB) surged by €1.8 billion in the first three months of the year.

This news comes amid speculation bank customers in Ireland are increasingly turning to foreign-owned banks as a place to keep their money.

The bank, which yesterday reported a pretax loss of €161 million for the first quarter of the year said that customer deposits jumped 31% to €5.7bn in the period.

The bank, which is part of the Danske Bank Group set aside €172m for loan impairment charges in Ireland.

On a group level Danske said Ireland and Northern Ireland account for about half of the group’s total loan writedowns.

Danske Bank Group chief executive Peter Straaup said proportionally, Ireland is still “the largest sinner”, and after that is Northern Ireland.

“I expect, unfortunately, that Ireland can be costly for the remainder of the year as well. Banking activities in Ireland continue to face serious challenges,” he said.

Operating profit at NIB was down 18% to €11m while income was down 17% to €35m.

NIB’s total loan book was €9.3bn, down 9% on last year, with commercial property loans amounting to €3.3bn, the are most of the bank’s loan impairment charges were in.

The bank said the quality of its €3.5bn mortgage book remained “satisfactory”.

NIB chief executive Andrew Healy said: “These results reflect a very difficult environment but they highlight the importance of the restructuring programme we completed last year. The impact of this can now be seen in our reduced cost base. It is also good to see strong deposit growth.

“Loan impairments of course remain very high and will continue to be heavily influenced by economic conditions, property values in particular. This said, we hope to see these numbers trend downwards over the coming quarters.

Mr Healy said he notes the “unprecedented changes” taking place in the Irish banking sector and the bank “very much” welcomes the government’s efforts to bring “greater certainty” to the industry.

“As part of a strong, international group that is committed to the Irish market for the long term, National Irish Bank will play its part in Ireland’s new banking landscape in the years to come,” he said.

Half of NIB’s branches closed in the last few months and the bank said it is changing its strategy in Ireland to focus on wealthy and corporate customers.

Meanwhile, Danske Bank, which is Denmark’s largest lender, said first-quarter profit fell 7.8%, hit hard by the loan impairment charges in Ireland.

Net income slipped to 709 million kroner (€94.6m) from 769 million kroner a year earlier.

Danske bought National Irish Bank in 2005.


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