Ulster Bank suffered an operating loss of £176 million in the three months to the end of September as impairment charges continued to mar its balance sheet.
In a trading statement released this morning the bank said impairment charges increased to £286m, up from £144m in the same period last year.
Ulster Bank said its impairment losses were "severe" and reflected credit metrics across the Irish economy.
Operating profit before impairment charges increased by 4 per cent to £110m.
Loans to customers fell by 3 per cent in the third quarter, while deposits increased by 16 per cent.
Ulster Bank chief executive Cormac McCarthy said the bank was fully committed to supporting its customers.
"We have reconfirmed the availability of credit to sound businesses and have launched a clearly defined appeals process if a small business loan application is unsuccessful. We continue to listen to our customers and respond to their needs,” he said.
Ulster Bank's parent Royal Bank of Scotland reported a third-quarter operating loss of £132 million, compared with a second-quarter profit of £869 million.
Earnings were hit by a charge of £858 million in relation to movements in the fair value of the group's own debt.
The bank said excluding this, it had an operating profit of £726 million in the third quarter, helped by a 21 per cent drop in bad debts compared to the second quarter.
RBS expects market conditions to remain challenging into the fourth quarter for its GBM investment banking arm, while the trends for its retail and commercial banking division were in line with those of the third quarter.
It added that it expected a bank levy to cost it £225 million to £250 million next year, rising to £350 million to £400 million in 2012.
Additional reporting: Reuters
