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NIB profits plunge 42pc as bad debt cover hits e704m

National Irish Bank (NIB) suffered a massive 42pc fall in operating profits last year as it cut staff numbers.

The Irish subsidiary of Danske Bank Group saw its income fall to €178m as it set aside €704m for impairment charges.

Overall, the Irish bank recorded pre-tax loss of €661m.

In contrast, its parent Danske Bank saw operating profit jump by 113pc to €4.1bn and income grow by 38pc to €8bn.

Andrew Healy, CEO of NIB, said the poor results in Ireland were an indication of the difficult market.

"Our 2009 results reflect the severe economic recession and what has possibly been the worst year in Irish banking history," he said.

"It's clear the property market remains frozen and this has led us to set aside very high impairment charges. Income is down because of reduced business activity levels and higher funding costs."

Last year, NIB revealed a cost-cutting plan, which included the loss of 150 jobs and the closure of almost half of its branches.

Mr Healy said the group had "responded decisively to the harsh realities of operating a bank in Ireland today".

"In December, we announced a major restructuring of our business to substantially reduce our costs and to reposition the bank in what is going to be a radically changed market," he said.

"We are fortunate to be part of Danske Bank, a strong, well-capitalised European banking group. Danske has reaffirmed its long-term commitment to Ireland and is fully behind our plans."

NIB has now agreed to improve severance pay for staff leaving under its plan to seek 150 redundancies, following recommendations by the Labour Relations Commission (LRC).



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The bank is cutting its 634-strong staff by 25pc in a wide-ranging restructuring that will see the closure of 25 of its 58 branches and a move to cash-free banking.

NIB accepted the LRC recommendation that staff receive 7.25 weeks of pay for each year up to a maximum of 2.5 years of salary, an increase from six weeks pay for every year of service up to a cap of two years' salary originally offered by the bank.

It was reported in December that the bank was actively looking for a new headquarters in the city centre, underscoring its commitment to Ireland.


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