Ulster Bank profits rise to £131 million

Parent company of Ulster Bank, the Royal Bank of Scotland, has reported first half-year profits of £131 million up 5% (£6 million) on the same period last year.

The bank’s total income increased by 9% or £24 million to £281 million reflecting volume growth and the positive effect of exchange rate movements which more than offset reduced benefit of interest free funds due to lower interest rates.

Net interest income rose by 15% or £25 million to £190 million. There was strong growth in customer lending, up by 23% or £1.8 billion, to £9.5 billion and deposits of the banking business, which rose by 14% or £1.1 billion, to £8.7 billion.

However the net interest margin fell slightly following reductions in both the UK base rate and the European Central Bank rate.

The bank reported that the number of customers increased by 7,000 since December 2002.

Non-interest income fell by £1 million to £91 million. Good growth in banking and card fee income was masked by lower levels of activity in the bank’s treasury arising from “difficult trading conditions” and depressed equity markets adversely affected brokerage fees.

Expenses increased by 9% or £11 million to £132 million, reflecting the annual pay award, and were adversely affected by exchange rate movements.

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.

(SP)