Profit at Danske Bank falls by almost 80%

Profits at Danske Bank in Northern Ireland fell by almost 80% in the first quarter of this year.

Pre-tax profits were £1.4m compared to £24.7m during same period in 2019.

The performance was heavily impacted by "loan loss provisions" related to coronavirus.

These provisions are money that the bank must put aside to cover loans which they assess are unlikely to be repaid in full.

The bank made provisions of almost £20m in the first quarter of 2020.

That compares to a £1.6m ‘writeback’ in provisions in the first quarter of 2019.

A writeback is where the loss on a loan was less bad than expected allowing money to be released and recognised as profit.

"The economic outlook for 2020 is challenging and this is reflected in the provision for higher loan impairments, which allows for the expectation that a greater number of customers will experience financial difficulties in the months ahead," the bank said.

"As a result both operating profit and profit before tax have fallen compared to the same period last year."

The bank’s chief executive, Kevin Kingston said they approved £64m of loans under the government’s Business Interruption Loan Scheme (CBILS) - cheap borrowing largely guaranteed by the state.

“Our volume of business lending during the crisis has been more than double the equivalent amount lent during the same period last year," he said.

He added that up to 86,000 personal customers will benefit from the cancellation of interest on all existing personal overdrafts for a period of three months.

“We also allowed mortgage customers, including customers who are residential buy-to-let landlords, to reduce or defer mortgage payments for up to three months.

"To date we have approved around 4,500 mortgage payment holidays."