Danish-owned National Irish Bank has reported a pre-tax loss of €400 million in the first half of this year after setting aside €420 million for loan impairment charges.
For the same period a year earlier, the bank reported a loss of €341 million after setting aside €367 million.
Operating profits at the bank fell by 22 per cent to €20 million during the first half of 2011, while income declined 19 per cent to €68 million due to reduced customer demand and the impaired loans.
The total loan book was €9.1 billion, down 9 per cent on last year. Commercial property loans amounted to €3.3 billion, with most of the bank’s loan impairment charges in this area. The quality of the bank’s €3.4 billion mortgage book remained satisfactory.
The bank said that costs fell by 18 per cent to €48 million during the first six months of 2011, largely due to the bank's restructuring programme.
The bank said customer deposits rose by 21 per cent to €5.1 billion during the six months under review. The bank made a €618 million loss in 2010.
“Performance for the first six months of 2011 is broadly in line with expectations and reflects the harsh economic conditions that continue to prevail. While our restructuring programme is delivering benefits to the cost line, impairments remain frustratingly high and are caused in the main by the continued decline in property values," said National Irish Bank chief executive Andrew Healy.
He added the unit's parent, Danske Banking Group, "remained strongly committed to Ireland and to National Irish Bank".
Danske reported pre-tax profits that were up 14 per cent to €480 million for its first half. This compares to profits of €420 million for the same period a year earlier.
Operating profit was down 16 per cent to €1,230 million, and the group set aside €750 million for loan impairment charges.
Total Tier 1 capital and total capital ratios were 16.6 per cent and 18.8 per cent compared to 13.7 per cent and 17.2 per cent for the same period last year.
