Northern Bank parent announces half-year £184m profit

The Northern Bank’s parent company the National Australia Group has released half-year results for its Financial Services Europe division announcing profits after tax of £184 million.

The retail banking arm of the Group in Great Britain and Ireland figures revealed profits are up 2.2% on the corresponding period last year and up 8.2% since September 2002.

Ross Pinney, the acting Chief Executive for Europe, said: “This is another satisfactory performance, achieved despite an increasingly challenging environment, particularly in Great Britain.

“We are now in a position to implement the next stage of our growth strategy in Europe, said Mr Pinney. “We will be expanding our business banking network in Clydesdale and Yorkshire banks, which includes opening new Regional Business Centres later this year in Liverpool, Bristol, Reading and Southampton. This expansion, which will create 60 new jobs, is the latest evidence of the Group’s commitment to grow its business across the UK and Ireland.”

The Group confirmed that John Stewart will take up his appointment in August as Managing Director and Chief Executive Officer of National Australia Group Europe and a Director of the National Australia Bank’s Principal Board.

The Group's net interest income increased to £449 million, reflecting modest growth in business volumes. Mortgage lending grew by 8% from March 2002.

Gross Loans and acceptances stood at an average £19.7 billion, with Yorkshire Bank achieving particularly strong growth in mortgage and business lending. This reflects the success of the Rapid Repay mortgage and the continued take up of Tailored Business Loans.

Across the European banks, average retail deposits grew to £13.8 billion, with higher levels of liquidity in the banking system as a result of weakness in global equity markets.

Other operating income declined slightly, reflecting a reduction in the volume of payment protection insurance linked to personal lending.

Operating expenses, excluding the pension fund expense, were £301 million, up 2.7% on March 2002. Continued focus on productivity improvements contained expense growth.

The charge for bad and doubtful debts decreased by 26.9% on March 2002, reflecting a strategic focus on credit risk management activities. The cost-to-income ratio, excluding the pension fund expense, was 47.7%, an improvement of 1.1% from March 2002.

During the reporting period Internet banking was launched in Northern and National Irish banks.

Also the Northern Bank won the Young Enterprise Special Award in the Northern Ireland Business Education Awards for its pioneering work promoting entrepreneurial skills in school children.

(SP)