Ulster Bank figures show return to profit
Results announced today for Ulster Bank report its first quarterly profit since 2009.
Ulster Bank made an operating profit of £17m (€21m) for Q1 2014 with net interest margin improved by 51bps to 2.36%.
Income has remained broadly stable following the transfer of legacy assets to the RCR division. Underlying expenses have reduced however the creation of the RCR division coupled with the impact of the new bank levy in the Republic of Ireland, has resulted in a £10m (€12m) increase to headline expenses.
Impairment losses have decreased by 80% with significant reductions across the mortgage, SME and corporate portfolios reflecting progress made in addressing legacy issues including a significant investment in programmes to support customers in financial difficulty. The loan deposit ratio improved to 110%.
Commenting on the Ulster Bank figures, Chief Executive Jim Brown said: “Today’s results show Ulster Bank returning to profitability for the first time since Quarter 1 2009, reflecting the progress across all areas of the Bank. The operating profit of £17m (€21m) is driven by stable revenues, a reduction of underlying expenses and an improvement in impairment losses. Improving customer demand, our ongoing focus on underlying expenses and the benefits of our work in helping our customers in mortgage arrears will continue to drive the momentum in the recovery of our business.
“While our underlying expenses have reduced, headline expenses remain elevated following the creation of the new RCR division and the impact of the new bank levy in the Republic of Ireland, however we expect continued reduction in underlying expenses as we address our costs across the business.
He added: “With our renewed focus on customer service and building a really good bank for our customers, we have seen a good response to our YES campaign for mortgage customers this quarter and a strong pipeline in business lending as a result of the Ahead for Business series of events across Ireland. We are focused on sustaining the recovery of our business which must be built around providing the best customer service on the island of Ireland.”
