Friday 25 May 2018

Ulster Bank profits slump as the tracker scandal continues to bite

Jane Howard, a senior executive at parent RBS, will be installed as Ulster Bank’s new CEO
Jane Howard, a senior executive at parent RBS, will be installed as Ulster Bank’s new CEO
Donal O'Donovan

Donal O'Donovan

Ulster Bank says operating costs reduced sharply in the first three months of the year, but profits slumped by around two-thirds to €11m.

The bank said it set aside an additional €11m provision in relation to so-called "legacy issues" understood to be mainly costs linked to the tracker mortgage scandal.

The figures are included in results published by its UK parent, Royal Bank of Scotland (RBS).

A €192m tracker scandal provision in 2017 tipped the Irish bank to a loss.

Yesterday, the bank reported interest income of €120m for the first three months of the year.

Its net interest margin - the difference between the interest on lending and deposits - was 1.80pc, up from 1.76pc in the previous period, but that reflected a shrinking loan book. Total deposits also fell.

The results come at the end of a difficult week for Ulster Bank customers, some of whom suffered in a high profile outage when some current accounts failed to update with transactions.

The bank also admitted the number of its tracker mortgage accounts overcharged or put on incorrect rates could increase by 1,500 to 2,000 for a potential total of 5,500.

Last week the Irish Independent revealed that Jane Howard, a senior executive at RBS, will be installed as Ulster Bank's new chief executive.

She'll replace outgoing Ulster Bank CEO Gerry Mallon, who is due to take over as CEO of Tesco Bank in the UK in July. RBS reported an operating profit before tax of £1.2bn (€1.4bn) for the three months to March 31.

Irish Independent

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