Danske admits NIB 'won't look good any time soon' after Q1 loss of €172m
DANSKE Bank yesterday admitted its Irish subsidiary National Irish Bank (NIB) wasn't "going to look good at any time" during 2011 after the unit posted another surge in loan losses for the first three months of the year.
Figures released yesterday show loan losses at NIB rose by 17pc to €172m in the first quarter of the year, triggering a 17pc rise in pre-tax losses. The result was pre-tax losses of €161m, compounding the €617m NIB lost in 2010.
The latest €172m impairment charge was worse than the €163m recorded in the three months to December 31, but remained below the record €221m NIB suffered in the second quarter of 2010.
"I think we will continue to see elevated loan losses [in Ireland]," Danske chief executive Peter Straarup told Bloomberg.
Those future impairments will be "possibly not as high" as the hit in the first quarter "but it's not going to look good at any time during the year," Mr Straarup added.
Danske blamed the poor Irish result on "difficult market conditions" which were exacerbated by the "public budget deficit".
"Most" of the latest round of impairments were linked to NIB's €3.3bn commercial property loan portfolio, NIB said in a statement. "The quality of the bank's €3.5bn mortgage book remains satisfactory," it added.
NIB boss Andrew Healy stressed that the latest result also "highlights the importance" of NIB's restructuring programme, as costs in the quarter fell from €29m to €24m.
NIB deposits on March 31 were up 31pc year-on-year after the bank added another 8pc to its deposit base over the first three months.
Mr Healy yesterday insisted that Danske remained "committed to the Irish market for the long term" and that NIB "will play its part in Ireland's new banking landscape in the years to come".