Ulster Bank's operating profit in the Republic more than doubled to €23 million in the first quarter of 2019, results from its parent Royal Bank of Scotland (RBS) show.
The figures also show net loans to customers increased by €100 million compared with the previous quarter, primarily driven by growth in its commercial loan portfolio.
Overall income during the quarter was flat at €166 million compared with the same period last year.
The bank, which has downsized its workforce and branch network in the Republic since the financial crisis and a £15 billion bailout from its parent, also benefited from a net impairment release of €13 million.
This reflected an improvement in the performance of the bank’s non-performing loan portfolio and a change in the accounting rules.
Ulster Bank's performance was at odds with its RBS parent, which reported a dip in first-quarter profit driven by economic uncertainty and competitive pressures.
The bank, still 62 per cent owned by the UK taxpayer, saw bottom-line profit fall 12.5 per cent to £707 million in the three months to March 31st.
Pretax operating profit also came in lower at £1 billion compared with £1.2 billion as RBS was hit by stiffer competition in the mortgage market and continuing uncertainty among businesses, with many reining in spending as Brexit fears linger. RBS shares were down nearly 5 per cent at 237.3p in morning trade.
The results come a day after RBS bosses warned at the bank’s annual general meeting about a Brexit hit as uncertainty weighs on the economy.
Chairman Sir Howard Davies told shareholders that worries over the European Union departure were hampering economic growth, which will take its toll on the bank's performance.
Uncertain backdrop
Outgoing chief executive Ross McEwan said: “This is a solid set of results set against a highly uncertain and competitive backdrop. “We continue to support our customers through this Brexit uncertainty while investing and innovating in digital services to meet rapidly changing customer needs.”
In October, RBS set aside £100 million to reflect the “more uncertain economic outlook” in Britain ahead of Brexit. On Friday, the group said that while it was retaining its full year guidance, the “ongoing impact of Brexit uncertainty on the economy, and associated delay in business borrowing decisions, is likely to make income growth more challenging in the near term”.
Nevertheless, profits came in ahead of consensus estimates. The figures also show that RBS shed £45 million in costs over the quarter and is on track to take £300 million out of the group by the end of the financial year. RBS is having to come to terms with the departure of Mr McEwan, who announced his departure on Thursday – his resignation coming after more than 5½ years at the helm. He has a year’s notice period and will stay in the post until a successor has been appointed, and to ensure an “orderly handover”. The New Zealander said he had achieved his strategy set out when he joined the bank, having returned the bank to profitability and put it on a firmer financial footing. – Additional reporting: Reuters
