NIB first-half losses largely unchanged at €401m

First-half losses at National Irish Bank remained largely unchanged — at €401m — this year, but its loan impairment charges fell by nearly €30m compared to the same period last year.

The Danish-owned NIB set aside €391m to cover underperforming loans, during the first six months of this year. That figure was down from €420m for the same period in 2011, and mainly covered commercial property loans.

Before impairments, operating losses amounted to €10m. Total income fell 6% to €64m. Net interest income fell from €61m to €56m on a year-on-year basis.

The first half post-impairment loss figure of €401m, was up slightly on the €400m reported for the first six months of 2011; but showed a significant slowdown in the increase. NIB had generated a loss of €341m in the first half of 2010.

The first half of this year also saw a 39% like-for-like decline in customer deposits, which the bank said reflected “unsustainable pricing pressures in the Irish market”. It added that the loss of some corporate and institutional deposits in Ireland “was not expected”.

On a broader scale, Danske Bank — NIB’s Danish parent — yesterday reported a 15% year-on-year increase in first half pre-tax profits, to €550m. This was after €946m worth of loan impairment charges were factored in.

Danske has, over the past three months, mapped out its restructuring plan for its Irish operations.

By November, National Irish Bank will be rebranded as Danske Bank (Ireland).

At that stage, the bank will also have totally disappeared from the high street — its over-the-counter services already being largely handled by An Post — with it closing the remainder of its 27 branches in the coming months, resulting in 100 voluntary redundancies.

Danske also recently said that it expects impairment charges at its Irish business to continue increasing for the next two years, potentially reaching a combined €942m between now and the end of 2014.

Speaking yesterday, NIB/Danske Bank Ireland country manager, Terry Browne said that the first half 2012 performance was “in line with expectations“, given the continuing weak nature of the economic conditions and falling property prices.


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