- Lending balances 7% higher year-on-year
- Total income down 1% due to lower interest rates
- Costs up 19% year-on-year, reflecting higher investment
- Profit before tax of £27.3m, down from £35m in Q1 2016
|Profit before loan impairment charges
|Loan impairment net recovery
|Profit before tax
|Loans (end of period)
|Deposits (end of period)
Danske Bank in Northern Ireland reports a profit before tax of £27.3m for the 3 months to the end of March 2017.
The lower profit before tax figure reflects the negative impact of the lower Bank of England Base Rate on our income, as well as higher costs associated with the implementation of our investment programme - driving competitiveness, efficiency and the delivery of new solutions for customers.
The core underlying business continues to perform strongly as evidenced by strong growth in both customer lending and deposit volumes.
Danske Bank reports a net credit in loan impairments of £7.1m, down from £8.6m in Q1 2016. This reflects a continuing recovery in property values and in the trading results of the Bank’s business customers.
Danske Bank continues to have a strong capacity to support new lending as demonstrated by a loan to deposit ratio of 75% at 31 March 2017.
Commenting on the results, Danske Bank UK CEO Kevin Kingston, said:
“I am pleased to report a healthy profit before tax of £27.3m for the first quarter of 2017. The underlying performance of our business remains strong, with lending up 7% year-on-year.
“Our successful mortgage product offering helped us to drive significant new mortgage business in quarter one, resulting in a 73% uplift in mortgage lending compared to the same period last year.
“We saw a 26% year-on-year increase in the amount of new personal current accounts being opened, with many of these customers opting to take up our reward-based current account.
“It has also been a strong start to the year in terms of our support for the small business sector, with lending up 42% year-on-year and an average of 35 new small business relationships being established every week.
“With regards to medium to larger-sized businesses, lending is also up -26% higher than over the same period in 2016.
“Amongst larger organisations the uncertainty we witnessed in the months after the EU referendum seems to be starting to dissipate. Importing companies are managing their risk in the face of rising inflation, while exporting companies are continuing to take advantage of current exchange rates. We helped to support multiple corporate investments in quarter one, including, significantly, the long-term refinancing of Titanic Quarter.
“Despite improved business activity across the Bank, total income is down 1% compared to quarter one 2016. This is largely as a result of the Bank of England Base Rate being lower this year than it was last year.
“In the current prolonged low interest rate environment, banks across the UK are continuing to look at ways to reduce their cost bases. In March 2017 we reached an agreement which will see professional services firm, Grant Thornton, occupy the third floor of our headquarters at Donegall Square West in Belfast. We continue to take an innovative approach to the interest rate challenge, with a rationale of seeking to implement change that does not negatively impact our customers.
“In these uncertain times, we remain steadfast in our commitment to supporting customers and the wider economy.”
For more information about Danske Bank Group’s financial statements, please go to Danske Bank Financial Reports.