Danske Bank Ireland has reported a loss before tax of €8.8m for the three months to the end of March, as it said its overall performance was in line with expectations.
The figure of €8.8m compares with a loss before tax of €184.3m the same time last year and pre-tax losses of €15m in the last quarter of 2012.
The big yearly drop in pre-tax losses is due to the fact that Danske Bank Ireland is now reporting only ”core business” which encompasses personal and business banking.
It said it expects its ”non-core business”, which includes commercial property loans – where the bulk of its losses are – to result in impairments of €335m between this year and next year.
In its results statement today, Danske Bank Ireland said that charges for impaired loans fell to €5.5m from €195.2m in the first quarter of 2012. Bad debt charges amounted to €15.7m in the last quarter of 2012.
The bank said that market conditions for the Irish commercial property market are beginning to show signs of stabilisation as property trading is picking up in prime Dublin locations.
”At the national level, however, activity remain subdued and vacancy rates remain high. More than half of non-core Ireland commercial property exposure relates to properties in the Dublin area,” it added.
The bank said that income increased to €14.6m, while the bank’s total loan book stood at €3.2 billion. Customer deposits at the bank rose by 12% to €3.4 billion in the first quarter of 2013 compared to the previous quarter.
Costs increased to €17.9m but Danske Bank Ireland said that when exceptional items associated with its recent rebranding and reorganisation, its underlying costs were down 5% quarter on quarter.
”While costs remain elevated, the underlying costs trend is moving in the right direction as is the case with impairments which continue their downward trajectory as previously guided,” Danske Bank Ireland’s country manager Terry Browne said.
He said the bank’s overall performance was in line with expectations given the continuing low growth and low interest rate environment.
Meanwhile, Danske Bank today kept its 2013 outlook unchanged after first quarter pretax profits rose 38% on the back of a drop in loan impairments.
Denmark’s biggest financial institution said that pre-tax profit for the quarter rose to 2.22 billion Danish crowns.
It kept to its 2013 outlook given in February for net profit in a range of €7.5-10 billion Danish crowns.