ULSTER BANK'S OPERATING PROFITS WIPED OUT BY BAD DEBTS - Ulster Bank has reported a massive jump in operating losses to almost €361m for the first half of this year. That compares to losses of just under €10m of losses for the same period last year. The bank has impaired loans worth €600m on its books, a three fold increase on a year ago. Ulster Bank's parent, Royal Bank of Scotland, is currently seeking to take control of the Arnotts department store which has heavy borrowings from the bank. Its chief executive Cormac McCarthy said he could not comment on the Arnotts development, but said it reflected the general moves by banks to protect their securities.
He said that while mistakes have been made, the banking sector is stabilising. He added that Ulster Bank is a core part of Royal Bank of Scotland and is in here to stay. He admitted that the first six months had been difficult for the bank with its losses mainly property driven amid the economic deterioration. But he pointed out that the bank's operating profits before impairment charges rose by 21% with margins also stabilising.
Mr McCarthy had been CEO of First Active when it became the first to introduce 100% mortgages here and he says that as an industry 'we made lots of mistakes'. But he says he is proud of what Ulster Bank has done in the last few years in an effort to 'right the ship'.
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MORNING BRIEFS - The Society of Chartered Surveyors has issued its quarterly report on the commercial property sector. It finds a modest increase in the level of interest in investing in office and retail space, though interest is still low by historic averages. It says that rents will continue to fall and lease lengths continue to shorten. The volume of vacant office space is rising while there are further declines in enquiries about industrial units where vacancy rates are also rising.
*** The ECB said yesterday that it expects a moderate economic recovery in the euro zone, though figures for the third quarter of this year had so far been better than expected. But ECB President Jean Claude Trichet warned the recovery would be 'dampened' by high unemployment and debt levels.
*** As our own harvest season gets underway, wheat prices are at an almost two year high after Russia imposed a temporary ban on grain exports because of wild fires that have been devastating the national crop. Russia exports around a quarter of its grain harvest.
