National Irish Bank has reported a pre-tax loss of €618m for the year to the end of December as it set aside €667m for loan impairment charges - a decrease of €37m from 2009.
The bank, owned by the Danske Bank Group, said that its pre-tax profits rose by 36% to €865m, while operating profits - before impairment charges - rose by 16% to €49m.
NIB's income was down 9% to €162m due to reduced customer demand and the impact of impaired loans. Costs for the year fell by 16% to €113m due to the bank's restructuring programme.
The bank said its total loan book stood at €9.4 billion by the end of 2010, down 8% on the previous year. Commercial property loans amounted to €3.3 billion, accounting for most of NIB's bad debt charges.
NIB said the quality of its €3.5 billion mortgage book remained 'relatively strong' with fewer than 300 customers in arrears. It also said it had no plans to follow other lenders in increasing its variable mortgage rates.
National Irish Bank's chief executive Andrew Healy said that conditions remain very difficult but the bank had acted very quickly to deal with the challenges faced by all banks operating in Ireland. He pointed out that while impairments remain very high, they are lower than last year.
Mr Healy also said that the bank remains 'committed' the the Irish market and is fully supported by its parent company, Danske Bank.
Half of NIB's branches nationwide have closed in recent months and in December the bank said it was changing its strategy in Ireland to focus on wealthy and corporate customers.
Danske Bank announces rights issue
Shares in Denmark's biggest bank Danske Bank plunged more than 10% today after announcing a rights issue to pay back a loan from Denmark taken out during the financial crisis.
Danske Bank said in a statement it planned to raise approximately 20 billion Danish kroner (€2.68 billion) through a rights issue to be launched in April at the latest, explaining it had borrowed a total of 26 billion kroner from the state in 2009.
The rights issue came as the group announced a net profit for 2010 up 113% to 3.66 billion kroner from 1.71 billion a year earlier. Its pre-tax profit leaped 36% to 6.45 billion.
'We consider the result acceptable given the market conditions. Still, it is far below the level of earnings that a bank of our size should deliver to its shareholders,' the bank said. The company's earnings also missed the expectations of analysts.
Danske Bank said its total income, including its insurance business, plunged 22% to 46.27 billion kroner from 59.34 billion in 2009.
'We are on the right track,' chief executive Peter Straarup said. 'We expect our results to improve further in 2011 and to see a continued decline in impairment charges,' he added.
Impairment charges in 2010 were 13.81 billion, down from 25.67 billion in 2009.
Danske Bank, the second-biggest Nordic banking group after Sweden's Nordea, has branches in Finland, Norway, Sweden, Ireland, Britain, Russia, Germany, Poland, Luxembourg and the Baltic countries.
