NORTHERN BANK, Danske’s Northern Ireland subsidiary, made a pretax loss of more than £95 million last year, according to its latest financial results.

The bank reported an operating profit, before impairment charges, of £47.7 million, which its parent group said reflected the “continued fragile market conditions”.

Northern Bank, which has 82 branches and more than 1,700 employees in Northern Ireland, had previously declared an operating profit, before impairment charges, of £68.6 million for 2009.

The bank blames the collapse of the property market in the North, and the lack of any “stabilisation” on the local scene, for the majority of its recent troubles.

Northern Bank set aside £142.9 million last year to cover bad debts, a slight improvement on the previous year’s impairment charges of £168.7 million.

Overall the bank’s total income fell slightly to £183.3 million in 2010, compared to £203.3 million the previous year. Although Northern Bank’s total lending balances also fell last year by 5 per cent, its deposit volumes increased by 8 per cent year on year.

Gerry Mallon, chief executive of Northern Bank, is determined to put a brave face on what the latest results say about the bank’s performance. “Despite the headline figures, we are making good progress on those aspects of performance which we are within our control. We firmly believe that, relative to the competition, we are in a strong position to capitalise on any recovery,” Mr Mallon said.

He said the bank had made “prudent provisions” for bad debt throughout the year, but adopted an even more conservative approach in the last quarter.

Mr Mallon said during this period some of its business customers, in particular larger companies within the property sector, had suffered from what he described as “a continued deterioration” in the economic environment”.

He said during 2010, Northern Bank had approved more than £1 billion in lending for local customers.

– Francess McDonnell