DANSKE-OWNED Northern Bank suffered pretax losses of nearly £50 million (€57 million) in the first nine months of the year, latest financial results show.
This represents a marked improvement compared to the bank’s position this time last year when it reported pretax losses of more than £102 million.
The bank recorded an operating profit of £39.6 million for the first three quarters of 2010.
Total income in the period was £139 million, down from £149 million in the corresponding timeframe 12 months earlier.
The high-street lender has signalled a serious lack of confidence in the North’s fragile economy by setting aside £89.4 million to cover potential bad debts.
Gerry Mallon, Northern Bank’s chief executive, said economic conditions remain “challenging” in Northern Ireland.
“I am pleased with the core performance of the business in what continues to be a fragile economic environment. We are winning new customers, we’ve increased our deposit base and we’re continuing to reduce costs.”
But Mr Mallon said the bank’s business customers, particularly in the property and construction sectors, had been badly affected by “noticeable deteriorations” in the local economic environment.
He said this had prompted Northern Bank, which employs around 1,700 people, to be prepared for potential bad debt scenarios.
The results show that while overall lending volumes fell in the first nine months by 5 per cent, compared to 2009 figures, deposits increased by 3 per cent year on year. Costs fell by 4 per cent.
Its chief executive is confident that, with its parent Danske behind it, Northern Bank has the capital strength to move on but Mr Mallon said there is evidence that people in the North are anxious about the economy and proposed public spending cuts.
“Consumers haven’t been spending and business owners haven’t been investing in their businesses. Time will tell when confidence will return,” he said.
