Surge in home loans boosts Danske Bank as profits hit £147.5m

DANSKE Bank has seen its profits soar to £147.5m buoyed by a surge in new mortgage lending.

And while write backs — cash set aside to cover expected loan losses that can then be released — still make up a portion of the profits, the bank said mortgage lending was up 28% in 2017.

Pre-tax profits before impairments stood at £118.3m — up from £91m a year earlier.

Danske Bank UK chief executive Kevin Kingston said he would have expected to see higher growth in its corporate business “if it wasn’t for the uncertainty of Brexit”.

Overall lending grew to just shy of £5bn.

The bank is expanding its online offering, and said it expects to double spending, which is aland ready in the “several millions”. “Restructuring and organisational change helped strengthen the results, but at the core was an improved underlying business performance,” Mr Kingston said.

“Lending balances are up 9% year-on-year and deposit growth has also been marked, rising by 5%.

“2017 was another strong year for our mortgage business. There was a 28% increase in new mortgage lending year-on-year, with our market activity share now having more than doubled since 2015.”

Mr Kingston said that the decision to relocate small business advisers back into key branches had led to a growth in the number of relationships being established.

The bank employs just under 1,400 staff in Northern Ireland, saw a small reduction in the workforce in 2017.

Overall, total income at the bank rose by 1%, with lending growth up 9%.

Speaking about the current state of the economy and the impact Brexit is having on business, he said: “The economy is growing, not growing very rapidly, but it is.

“For me, it is about a lost opportunity — it should be growing faster.

“We are seeing our customers investing, our lending in corporate business is up, new money increased by 3%.

“What we are not seeing is those 10-year investment decisions, and I can understand that. Because if I was making a decision in that kind of timeframe, with the uncertainty that is out there, I would probably hedge my bets too.”