Impairment losses linked to bad loans at Ulster Bank continue to rise, according to the lender’s latest quarterly results.
The bank, a division of Royal Bank of Scotland (RBS), said its impairment losses rose to £327 million (€380 million) in the third quarter from £269 million (€313 million) in the previous three-month period.
“Bank impairments remained high reflecting the difficult economic environment in Ireland with elevated default levels across both mortgage and other corporate portfolios,” RBS said in a statement accompanying the results.
Ulster Bank posted an operating loss of £219 million (€255 million) for the three months to the end of September, compared to a loss of £176 million (€205 million) for the same period last year.
RBS said it expected difficult market conditions in the fourth quarter, with banks around the world hit by Europe's debt crisis, and the part-nationalised lender added it had cut its exposure to Greece and Italy.
RBS, which is 83 per cent owned by the British government following a state bailout during the 2008 credit crisis, said today that it had made a third-quarter net profit of around £1.2 billion.
RBS followed the likes of Barclays and Morgan Stanley in benefiting from a debt accounting gain, which boosted its earnings by £2.36 billion and helped offset lower profits at its GBM investment banking division.
Its third quarter net profit was up from a second-quarter loss of £897 million, although the operating profit at its core division fell to £1.3 billion from £1.7 billion in the previous quarter.
RBS added that it had taken a further impairment loss of £142 million on its exposure to Greece during the third quarter.
"RBS's third-quarter results show the improved strength and resilience we have built up since 2008," chief executive Stephen Hester said in a statement.
"They also highlight the external pressures facing banks, and economies more broadly, which are making the road to recovery longer and bumpier than hoped for," he added.