NIB faces difficult quarter as €632m hit revealed
Published 02/11/2011 | 05:00
LOAN losses and impairments at National Irish Bank are running at almost a quarter of the bank's entire loan book after NIB took another €632m hit in the first nine months of the year.
The sobering figures were revealed in NIB's results for the nine months to September 30, when impairments rose 25pc amid "continued weakness in the property market".
The Danish bank's chief, Peter Straarup, yesterday admitted the fourth quarter was likely to be "difficult" for NIB but said he still "hopes to see a turnaround" in Ireland in 2012.
Danske has insisted it remains "strongly committed" to Ireland despite losses since entering the market in 2005.
The extent of those losses was laid bare in Danske's group results yesterday, showing total loan impairments are now running at DK16.9bn (€2.3bn) or "23pc of the entire exposure".
In a separate Irish announcement, NIB chief Andrew Healy said the "very high" impairments of €632m were "mostly due to the continued weakness of the property market".
"We hope to see a downward trajectory moving forward," he added. The bulk of the impairments have stemmed from NIB's €3.3bn commercial property book.
Mr Straarup yesterday said the property book losses were triggered by "lower rental income and a loss of tenants".
The bank said that the quality of its €3.4bn mortgage book "remained satisfactory".
Deposits at September 30 were up 18pc year-on-year to just over €5bn, reflecting the strength of Danske's A-rating.
Yesterday's results also showed a significant improvement in NIB's cost base, as cost fell from €88m to €71m.
Pre-tax losses rose 28pc to €600m for the nine months, as income dipped by €21m.