National Irish Bank has reported increased losses for the first half of this year, as it set aside more money to cope with potential loan losses.
The bank, which is owned by Danske Bank, reported a pre-tax loss of €400m, compared with a loss of €341m in the same period last year. NIB set aside €420m for bad loans, compared with €367m a year earlier. It said most of this related to commercial property, describing its €3.4 billion of mortgage loan book as 'satisfactory'.
Excluding loan impairment charges, operating profits were down 22% to €20m. Deposits at the bank were up more than 20% to €5.1 billion, while total loans were 9% lower.
NIB said lower customer demand reduced income by almost 20%, though its restructuring programme helped cut costs by 18%.
Chief executive Andrew Healy said the performance was in line with expectations, and reflected continuing harsh economic conditions. He said impairment charges remained 'frustratingly high' due to further falls in property values.
Parent company Danske Bank's pre-tax profits rose by 14% to €480m in the period. The bank, Denmark's biggest, said that its quarterly net profits rose to 1.2 billion Danish kroner (€161m). Analysts had expected a profit of 1.08 billion kroner.
Provisions for losses on loans dropped 26% compared to the same time last year to 2.75 billion kroner, Danske Bank said.
This was a smaller fall than expected by analysts but the bank said it expected total provisions to be lower in 2011 than last year.
