Saturday 21 April 2018

Profits surge seven-fold at under pressure Ulster Bank

Chief executive Ross McEwan
Chief executive Ross McEwan

Donal O'Donovan and Ailish O'Hora

Ulster Bank posted a seven- fold increase in profits to £51m (€69m) in the first three months of the year, and said mortgage draw-downs rose sharply.

The surge in profits will add to calls on the country's third biggest bank to slash the interest it charges on standard variable rate home loans, but the bank has so far resisted such pressure.

Total income rose by around a quarter to €255m from the previous year and the bank has now recorded profits in each of the last five quarters.

The bank recorded a 55pc increase in the value of mortgage loans being drawn down by customers in the three months to the end of March. That period coincided with the introduction of new limits on the size of home loans by the Central Bank, but the mortgages are likely to have been approved before the new rules came into force.

Lending to business grew by almost a third over the same period.

"Ulster Bank has increased lending to SME and corporate customers by 31pc this quarter and has £1.5bn (€1.9bn) available for business customers in 2015," the bank said.

"We have recently launched new business propositions for companies operating in the food and drink and international business sectors. Our new pasture loan has also proved popular with our agri customers."

A return to profits Ulster Bank is no longer a major headache for parent Royal Bank of Scotland (RBS).

The bank said yesterday that it expects to settle with US authorities investigating alleged foreign exchange manipulation in the coming weeks and set aside a further £334m to cover the cost.

The new charge takes the total set aside by RBS for future foreign exchange settlements to £704m.

RBS said yesterday it was in advanced discussions over a settlement in relation to a criminal investigation conducted by the US Department of Justice and other authorities, and expects to settle before the end of June.

RBS, 80pc owned by the British government, remains hampered by a number of investigations into past misconduct, undermining its turnaround under chief executive Ross McEwan who warned of another tough year as the bank grapples with a mammoth restructuring and the consequences of past misdeeds.

RBS made an operating profit of £1.63bn in the three months of this year but posted an attributable loss of £446m compared to a £1.2bn profit a year ago.

Irish Independent

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