Ulster Bank cuts Q1 losses to £164mFriday 03 May 2013 11.54
Ulster Bank has reported an operating loss of £164m (€194.8m) for the first quarter of 2013.
That compares to the £310m loss reported for the same period last year.
The bank said the dip in losses was due to a 39% reduction in losses on impairments.
They were £240m (€284.8m) in the first three months of the year, compared to £394m (€467.5m) in Q1 2012.
Income at the bank fell by £6m (€7.1m), which was blamed on costs associated with trying to raise deposits and lower interest-earning loan volumes.
However the bank has seen deposits increase, up 8% to £22.7 billion.
Ulster Bank's parent company RBS - which is majority owned by the British state - said credit trends in Ireland were "turning a corner", with Ulster Bank's impairment losses down 27% from Q1 2012.
RBS says government stake could be sold within year
RBS has reported a £826m pre-tax profit for Q1 2013, compared to a £1.5bn loss in the same period last year.
In an online video statement posted alongside the results, RBS chairman Philip Hampton said he expected the bank's recovery process to be "substantially complete" in the next 12 to 24 months.
He said this would allow the British government to begin selling its stake from the middle of 2014, if not earlier.
Chief executive Stephen Hester said the cleanup of the troubled bank, which is 81% owned by the British taxpayer after it was rescued by the government in 2008, would be largely complete by the middle of 2014.
That means RBS could be privatised and look "much more like a normal bank," he said.
The timing of the sale, however, remains up to the UK government. "When it comes we will be ready," Hester told analysts in a morning conference call. "But it is a decision for others."
The question of when the shares are sold is important because it will determine whether taxpayers get their money back - or take a loss on their investment in the bank.
Hester told analysts it was unlikely the government would sell its entire stake in a single transaction - particularly as the government also has a stake in another bank, Lloyds, that also needs to be sold.
He said the taxpayer might get a return over time on average over multiple transactions. But he said he thought that privatisation would send an important message to the British people.
''Privatisation would be a symbol of recovery for the UK, '' he said.
Though it was the bank's first quarterly profit since 2011, analysts say operating profit was below expectations and shares were down 5.8% at 290 pence, well off the 410 pence it would take for the government's investment to break even.
Some analysts suggest the break-even point is really higher, at around 505 pence, because extra costs.