NATIONAL IRISH Bank (NIB) reported a pretax loss of €468 million for the nine months to the end of September as impairment charges on commercial property loans continued to mar its balance sheet.
The bank, owned by the Danske Bank Group, was forced to set aside loan impairment charges of €504 million for the nine-month period, down €40 million on the level of impairments in the first nine months of 2009. Some €137 million in impairments were recorded in the third quarter.
Danske Bank said “difficult market conditions” in both its Republic of Ireland and Northern Ireland operations “persisted” during the quarter.
Although the size of its quarterly loan impairments have fallen since the second quarter, impairment charges in Ireland are likely to remain high, according to Peter Straarup, chairman of Danske’s executive board.
“The future level of loan impairment charges in Ireland will depend extensively on the economic recovery,” the bank’s Danish parent stated.
NIB reported an operating profit before impairment charges of €36 million, down 25 per cent on the same period last year.
Income fell 11 per cent to €124 million due to reduced customer demand, the impact of impaired loans and lower deposit margins. Costs fell by 3 per cent to €88 million because of its restructuring programme.
NIB chief executive Andrew Healy said he believed loan impairments had peaked in the first half of 2010.
Mr Healy indicated the bank was now prioritising the implementation of the restructuring programme, which he said was on track to be completed by the end of the year.
“We’ve taken early and decisive action to reduce our costs and reposition National Irish in a banking market that is undergoing massive change,” he said.
The bank is on track to close 25 of its 58 branches in the Republic, in accordance with a restructuring plan announced late last year.
Some 13 of the 25 branches earmarked for closure have shut. Staff numbers are on track to fall by 150 – or 25 per cent – with most of the redundancies taking place in the last quarter.
The bank’s total loan book was €9.8 billion at the end of September, down 7 per cent on last year.
Its commercial property loans, from which most of the bank’s loan impairments stem, amounted to €3.3 billion. NIB said its €3.6 billion mortgage book remained relatively strong, with less than 250 customers in arrears. Total deposits amounted to €4.3 billion, a reduction of 2 per cent.
