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Sunday 15 March 2015
Business Newsletter
Lending by AIB, Ulster and BoI plunged by 12bn in 2014
Sarah McCabe Twitter
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Published
08/03/2015 | 02:30
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Ulster Bank
NET lending by the country's three biggest banks declined by a combined 12bn last year.
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Recent results by Allied Irish Bank, Bank of Ireland and Ulster Bank show all three failed to grow their lending balances. All, bar Bank of Ireland, also failed to grow customer accounts.
Despite this, the banks -who have received billions from the Irish and British governments in bailout funding - made a combined 3bn in pre-tax profit last year. All three swung to profit for the first year since before the financial crisis, their 2014 results showed.
"Even though these banks have seen a drop in net lending since 2013, their return to profit has been aided by raising the interest rate margins on loans, reducing tracker mortgage exposure and lower savings deposit rates," said ETX Capital analyst Des Doyle. "None of which has benefitted the end consumer."
The banks said their rate of new loan approvals rose during the year, but not by enough to offset people paying off their loans and other arrangements.
At David Duffy's AIB, pre-tax profit totalled 1.1bn - but net loans to customers fell to 63.4bn from 65.7bn in 2013, and customer accounts fell from 65.7bn to 64bn.
At Richie Boucher's Bank of Ireland, pre-tax profit was 921m - but net loans to customers fell 2.4bn to 82bn in the year. Customer deposits increased, but only marginally, from 75bn to 74bn.
At Jim Brown's Ulster Bank, adjusted operating profit was stg£609m, but total loans to customers fell by stg£7bn to stg£24.7bn and customer deposits fell stg£1.1bn to stg£20.6bn
Also working in the banks' favour was a large rise in Irish property values in 2014.
Gains of up to 15pc in Dublin property values allowed all three to claw back hundreds of millions that had previously been written off.
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