28/02/2013

Ulster Bank Reports Over £1bn Loss

Ulster Bank has reported an annual loss of more than £1bn.

The bank blamed challenging economic environment across the island of Ireland and said it had a significant impact on its financial performance for 2012.

This is due to £1.4bn of loan impairments, which are write-offs to cover loans that were unlikely to be repaid.

Ulster Bank made up a significant proportion of the £5bn of loan impairments reported by parent group Royal Bank of Scotland (RBS).

The bank reported an operating profit, before impairment losses, of £324m. Net interest income also fell year-on-year to £649m from £736m. Total income for the year dropped from £947m to £845m.

Ulster Bank Chief Executive Jim Brown said: "Operating loss increased by £56m year-on-year, primarily driven by a reduction in income as a result of a smaller balance sheet.

"Income decreased by 6% year-on-year in constant currency terms, largely due to the high cost of deposit raising, coupled with lower interest-earning loan volumes.

"Impairment losses remained elevated, reflecting underlying credit metrics, new defaulting customers and deteriorating security values.

"As the economic environment on the island of Ireland begins to stabilise, Ulster Bank continues to make good progress on the restructuring of the business as demonstrated across key metrics within the core bank, including deposit growth, an improvement in the loan to deposit ratio, decreased expenses and the moderation of impairments."

(GK)


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