ULSTER LOAN LOSSES WORSE THAN EXPECTED - Ulster Bank has reported that its total impairment losses almost doubled to £1.16 billion sterling for last year, up from £649m in 2009. It reports in sterling because its parent is UK bank Royal Bank of Scotland.
Ulster Bank reports higher losses on its mortgage portfolio and says 1.4% of its mortgage book was impaired at the end of 2010, up from 0.5% last year. 6.9% of its property loans are impaired.
Ulster Bank's cost-saving programmes saw the bank increase profits before impairments by 50% to £400m.
Its parent, RBS - which is 83% owned by the British taxpayer - says conditions in Ireland remain very challenging, and RBS's own results show the effects of the bank's exposure to Ireland's economic slump and to charges for bad loans.
Dolmen Securities' head of research Oliver Gilvarry said the impairment charges in the final quarter were much higher than the market had been expecting, particularly in mortgages.
He said the bank's net interest margin also fell, reflecting intense competition for deposits in the Irish market. Mr Gilvarry said the results had a 'negative read-through' for the other Irish banks.
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