Economy to slow even with a Brexit deal, says Ulster Bank
THE head of Ulster Bank has said he expects the local economy to grow by just 1% in 2019, even in the best case scenario for a Brexit deal.
Richard Donnan said its analysis put last year’s growth at around 1.5%.
But he said all the indicators show a slowdown under way.
“In a ‘deal’ scenario we would be looking at around 1%. If you look at our PMI (purchasing managers index), it has been slowing as we go through the year,” he said.
“We would expect slower growth as we stand today.”
He said there was still too much uncertainty to forecast a figure for a no-deal scenario.
Mr Donnan was speaking as Ulster Bank announced a pretax profit of £51m for 2018, £8m lower than in 2017.
The lender recorded a £7m rise in its total income to £191m last year.
It also reported a 15% rise in new corporate lending, a 27% in-
crease in small business lending and said new mortgage lending rose 30% year-on-year.
“They’re a good set of results. For me the most encouraging thing is that for the last three years we’ve shown progress yearon-year,” he added.
Mr Donnan said Ulster Bank’s primary concern around Brexit has been to ensure it will be in a position to support its customers whatever the scenario after March 29.
“We are preparing for the worst-case scenario so we can provide continuity of service to our customers,” he said.
He said larger businesses here have been active in preparing themselves for Brexit, with many stockpiling, establishing bases in the Republic or creating subsidiaries over the border.
“As we get closer to the timeline, we are seeing some businesses holding off on some capital expenditure,” he added.
But Mr Donnan said small businesses face a more difficult conundrum.
“The outcome is so uncertain. To make fundamental changes to try and second-guess an outcome is challenging for small businesses,” he said.
While somewhat reluctant to enter the political fray, the Ulster Bank boss reiterated the necessity for businesses to be given certainty.
“I would just encourage people to work together and move forward to get decisions made,” he said.
“Where there has been a delay in making significant decisions, whether that’s around infrastructure or medium term strategy around skills or the programme for government, the delays of those will have an opportunity cost for Northern Ireland in the longer-term.”
Mr Donnan also confirmed that the lender will not shut any branches this year.
It followed the closure of 11 in 2018, which left the bank with 44 branches here.
“We definitely will not be closing any more branches in 2019,” he said.
“At the peak we would have had 92 branches and now we’re at 44.
“So there has been a substantial reshaping of that in line with customer behaviour.”
He said the “radically changing” nature of banking sees 210,000 Ulster Bank customers use its mobile app, accessing online services six million times each month.
Mr Donnan also confirmed that Ulster Bank reduced its workforce by around 100 people over the year, with staffing numbers currently at 1,750.