National Irish Bank Declares €400m Loss

09 August 2011 - Which Way to Pay

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National Irish Bank Declares €400m Loss

The National Irish Bank, owned by the Danske Bank Group, has posted a pre-tax loss of €400m for the first six months of this year. The bank has set aside €420m to manage bad loans leading to the pre-tax loss.

The chief executive of the National Irish Bank, Andrew Healy said that the performance and figures released where in tandem with the "harsh economic conditions that continue to prevail" and had not been unexpected. Whilst insisting that the Danske Bank Group remains strongly committed to Ireland and to National Irish Bank, Mr Healy furthered his comments saying;

"While our restructuring programme is delivering benefits to the cost line, impairments remain frustratingly high and are caused in the main by the continued decline in property values."

The bank has suffered largely as a result of impairment charges on commercial property loans which have amounted to €3.3bn. The bank’s total loan book was €9.1bn, down 9pc on last year, however Healy stated that "We believe the changes we have made to our business create a good platform for growth once conditions improve."

Indeed, we can but hope that conditions do improve, however the financial instability has seen that customer deposits increasing by 21pc to the €5.1bn. The bank reported an operating profit before impairment charges of €20m, a drop of 22pc. Adding to the sentiment, income fell 19pc to €68m due to reduced customer demand and the impact of the impaired loans.

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