Danske Bank reports a '˜good year' as profts hit £117 million

Speaking as the bank reported pre-tax profits for 2016 of £117 million, Mr Kingston said the bank was in a strong position to help drive growth and ready to lend.

Although the pre-tax figure was down on the £141.9m posted for 2015, that figure was boosted by the return of £54.9m that had been set aside for impairment charges but was not required as the bank’s ‘bad loan’ book has steadily reduced.

This year the figure was £25.9m and the bank expects that to reduce radically as 2017 progresses.

The year-on-year increase reflects growth in both customer lending and deposit volumes, partially offset by the negative impact of a lower Bank of England Base Rate.

Reporting a shift in appetite for borrowing in the wake of the Brexit vote in June, Mr Kingston said it was clear that concern over inflation, interest rates and other influences such as Europe and the Trump presidency had created a mood of instability.

Stating that 2017 was “almost overshadowed even as we sit here at the start of February”, he said waiting for conditions to improve was likely to pay off in the immediate future.

“I am pleased with what is a strong financial performance in 2016,” he said.

“With the prospect of significant change in the external environment, and slow growth in the local economy, we have delivered an increased operating profit of £91 million.

“Alongside strong revenue performance, we have seen continued net loan impairment recoveries, although these write backs have declined throughout 2016 and we expect this trend to continue.”

Acknowledging a fear of debt generally among consumers and business, he said mortgage approvals were up 96% over last year.

The vast majority of those new approvals have been on fixed rate terms as people try to protect themselves from interest rate rises.

Commercially he said there had been something of a slowdown in business.

“While customers were not cancelling projects they were also not bringing new projects to us at the same rate, and overall demand was more subdued,” he said.

For the bank he said the year ahead would be one of investment in infrastructure and staff .

“As a business, we are committed to responding to these changing customer behaviours and therefore priorities for investment continue to adapt and evolve. “Despite the prospect of significant change in the external environment, we remain fully committed to our role as a driver of growth in the local economy. We have the capacity to support substantial new lending to both personal and business customers. In 2017 our strong position in the marketplace will be complemented by the introduction of more innovative banking solutions and a drive to improve overall customer experiences”.