DANISH-OWNED NATIONAL Irish Bank (NIB) benefited from a 31 per cent annual boost in deposits in the first quarter, as customers moved funds from troubled Irish banks to a foreign-owned bank.

Deposits at NIB rose to €5.7 billion in March from €4.3 billion a year earlier as the domestic lenders shed deposits amid concerns over the Irish banks.

NIB made a pretax loss of €161 million in the first three months, worse than the €133 million lost for the same period last year.

The company booked a charge of €172 million for loan losses, an increase from the €146 million charge in the first quarter of last year. Commercial property and development loans accounted for 80 per cent of the bad debt charge.

“Loan impairments of course remain very high and will continue to be heavily influenced by economic conditions, property values in particular,” said NIB chief executive Andrew Healy.

“This said, we hope to see these numbers trend downwards over the coming quarters.”

NIB has taken provisions totalling almost €1.8 billion for bad debts on a loan book of €9.3 billion during the financial crisis.

The bank made an operating profit before loan losses of €11 million, a decrease of 18 per cent. Income fell 17 per cent to €35 million due to reduced customer demand and impaired loans.

Costs dropped by 17 per cent to €24 million as the bank closed about half its branches and cut staff numbers by about a quarter.

NIB’s loan book fell by 9 per cent to €9.3 billion. Less than 350 mortgage customers are in arrears, the bank said. It has mortgages of about €3.5 billion. Some 10 per cent of the impairment charge related to mortgages.

Bad debts at NIB accounted for 45 per cent of the €381 million impairment charge at the bank’s parent company, Danske. – (Additional reporting Bloomberg)