Strong lending growth helped Ulster Bank to post a 5 per cent increase in half-year profits to £131 million with exchange rate movements offsetting less favourable market conditions in treasury and stockbroking.
Net interest income rose by 15 per cent or £25 million to £190 million, reflecting strong growth in both average customer lending and deposits of the banking business. Lending increased by 23 per cent to £9.5 billion while deposits rose to £8.7 billion.
But on the downside Ulster Bank's treasury operations took a hit from the turbulence in foreign exchange and bond markets while revenues at its stockbroking arm NCB were adversely affected by weak equity markets.
The charge for provisions for bad debts was up £7 million to £18 million reflecting growth in lending and a slight deterioration in asset quality.
Expenses across the group increased by 9 per cent or £11 million to £132 million, reflecting the annual pay award, and were adversely affected by exchange rate movements.