Ulster Bank said yesterday that its net interest income rose by 35 per cent to £256 million sterling in the first half, boosted by the acquisition of First Active.
As a result of its strong first half performance, the bank contributed £170 million sterling to the coffers of its parent company, Royal Bank of Scotland, an increase of £39 million or 30 per cent on last year.
Ulster Bank reported strong volume growth, particularly in residential mortgages where it believes it has grown the market share enjoyed by the merged business. Mortgage lending was up by 200 per cent to £6.6 billion as First Active's current account mortgage and Ulster Bank's tracker mortgage proved popular with home buyers.
This drove total income up by 25 per cent or £70 million to £351 million as the number of customers increased by 431,000, 376,000 of them due to the addition of the First Active network.
However, the inclusion of First Active's lower margin mortgage business knocked the bank's net interest margin, although Ulster Bank declined to provide a precise figure.
If the acquisition of First Active and the disposal of NCB Stockbrokers last October is stripped out, total income was up by 9 per cent while net interest income also increased by 9 per cent, the bank said.
Growth in non-interest income increased by a more modest 4 per cent to £95 million as strong growth in lending fees and sales of treasury products was partially offset by lower brokerage fees following the sale of NCB.
The bank reported strong growth in overall loans and advances to £17.7 billion as its business banking division also performed strongly while deposits increased to £11.9 billion from £9 billion a year earlier.
The bad debt provision was unchanged at £18 million sterling, reflecting improved asset quality, Ulster Bank said, while the cost/income ratio fell to 46.4 per cent.
Chief executive Cormac McCarthy declined to comment on whether the bank would be interested in bidding for the disgraced National Irish Bank (NIB) if it were to be sold by its Australian owners.
However, he said: "We have a very strong foundation to grow organically. We have lots to do to build this business."
