THE depth of the ongoing financial difficulties facing the Ulster Bank has been underlined as it announced a loss of more than £1 billion - a fifth of the total losses announced by taxpayer owned Royal Bank of Scotland.
An operating profit of £324 million was eclipsed by impairment charges of £1,364m leaving a loss of £1,040m.
Insisting that the economic environment on the island of Ireland was beginning to stabilise, chief executive Jim Brown said the bank continued to make “good progress” on the restructuring of the business.
“Impairment losses remained elevated, reflecting underlying credit metrics, new defaulting customers and deteriorating security values,” he said, adding that the bank remained committed to working with customers ready to “engage with us on a genuine basis to find a solution”.
“We continue to remain focused on the recovery of our business – supporting the communities in which we operate and serving the needs of our 1.9 million customers across the island of Ireland.”
The bank’s operating loss rose by £56m year-on-year, primarily driven by a reduction in income as a result of a smaller balance sheet, Mr Brown said.
Income decreased by six per cent year-on-year in constant currency terms, due to the high cost of deposit raising, coupled with lower interest-earning loan volumes.
Expenses fell by £26m over the period, as the implementation of cost management initiatives continued to progress.
Nationally, RBS reported its fifth annual loss since it was rescued by the government in 2008.
The bank is 81 per cent owned by the taxpayer and made a pre-tax loss of £5.17bn.