THERE are signs of stabilisation within the economy, Danske bank chief Gerry Mallon said yesterday but improvement will be slow and more businesses will fail to survive the property crash and resulting recession.
Speaking as the Northern Bank identity was replaced by corporate Danske branding across the Danish bank’s international operations, Mr Mallon said there were encouraging signs but that they were not entirely positive.
Bought seven years ago, the rebranding exercise brings the 200 year-old Northern into line with Danske operations across Scandanavia and the Baltic - all countries where local businesses are looking hopefully for exapansion.
But while the idea of the new look had been well received Mr Mallon warned that regeneration of the Northern Ireland economy would be a tougher task.
“Things are stabilising, and not getting worse is as good as we’re hoping for at the minute,” he said.
“We given our forecast that we will be profitable again in 2014. I see banks very much as a bellwether of the economy and certainly, from a Danske perspective, we bank now approximately one third of businesses in Northern Ireland and about one in five people.
“I like to think that on average we have a better book than most but what I can see is our underlying performance improving and we can see out impairments coming down on a quarter on quarter basis.
“We believe it’s coming to an end, the level of impairments, the question though is how much better is the underlying economy getting to allow us to perform our way out of those impairment issues.”
Unfortunate he said he saw “very little confidence, very little exuberance and very little future investment” amongst local companies backed be a similar hesitancy amongst consumers.
“We see things stopping getting worse but there’s very little sign that there are fundamental drivers to make things get better and I think we need to see an improvement in the global, European and national economies before we start to see any fundamental growth in Northern Ireland.”
With many companies still ‘hamstrung’ by property debt he said they faced a frustrating time.
“Effectively it’s a bad investment for them - it’s not going to destroy their business but it’s going to reduce their businesses ability to perform and grow in the future.
Similarly, he said conditions would remain hard for the construction sector.
“I think there are businesses that have been struggling for a long time to keep afloat and that have just about managed to keep afloat.
“There are still some companies living hand to mouth who have used up a lot of their reserves and there is still potential for more companies to get into difficulties, but it will not be for a lack of support on our part; we are doing what we can.”