Danske Bank posts £40m profit for H1 2018

Danske Bank in Northern Ireland made a pre-tax profit of £40.6 million in the first half (H1) of 2018 according to the its latest set of results.

Wednesday, 18th July 2018, 6:46 pm
Updated Wednesday, 18th July 2018, 6:48 pm
Danske Bank UK chief executive Kevin Kingston

The figure was down on H1 2017 though deposits and loans rose, as the bank faced impairment charges of £5.8m as opposed to a recovery over the same period last year of £15.2m.

Total income increased by 2% fuelled by a 9% growth in lending and an 11% rise in deposits and higher UK interest rates, partially offset by lower fee income following the sale of the Bank’s wealth business in 2017.

The bank said restructuring initiatives completed in 2017 enabled increased investment in new technology and customer solutions, whilst also supporting a net reduction in operating costs.

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It added that it continues to have capacity to support further lending growth as demonstrated by a loan to deposit ratio of 73% as of June 2018.

“The underlying performance of the bank remains strong, with lending up 9% year-on-year,” said Danske Bank UK Chief Executive Kevin Kingston.

“In personal banking we introduced a new remortgage product aimed at mortgage switchers, and this has further strengthened our overall mortgage customer proposition.

“Last year was a record year in terms of mortgage lending, and the upward trajectory has continued in the first six months of 2018 – with new mortgage lending up 28% year-on-year.”

Latest market data indicated that the bank is currently funding a quarter of all first time buyer mortgages across the province, he added.

“To improve personal customer experience, and after listening to customer feedback, we also re-evaluated our savings products and introduced a new notice account for longer-term savings, offering a return of 1.1%.

“In business banking new lending is up 19% year-on-year, as we continue to further strengthen our leading market share in the Corporate and Business segment.

“Notable deals included funding support in Belfast for Andras Hotel Group’s new £12m ‘Hampton by Hilton’ nine-story hotel and their £5m 60-bedroom extension at the Holiday Inn Express, as well as support to cloud provider Novosco, who through ongoing expansion are aiming to create 150 new jobs.”