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Losses increase at Northern Bank | Losses increase at Northern Bank |
(about 2 hours later) | |
Northern Bank made losses of £217m in 2011, mainly as a result of bad commercial property loans. | Northern Bank made losses of £217m in 2011, mainly as a result of bad commercial property loans. |
That figure is more than double its losses for 2010. | That figure is more than double its losses for 2010. |
The bank's sister company in the Republic of Ireland, NIB, lost more than 800m euro (£672m). | The bank's sister company in the Republic of Ireland, NIB, lost more than 800m euro (£672m). |
Both firms are owned by Denmark's Danske Bank which made an overall profit despite huge loan impairment charges on commercial property segments in Ireland and Northern Ireland. | Both firms are owned by Denmark's Danske Bank which made an overall profit despite huge loan impairment charges on commercial property segments in Ireland and Northern Ireland. |
Northern Bank's account statements made clear that the bank's property loans were responsible for the bulk of the losses. | |
"Loan impairment declined somewhat from the third to the fourth quarter," they said. | |
"Charges remained high, though, primarily because commercial property prices fell. | |
"The property development segment saw the highest percentage of charges, mainly because of lower residential construction activity. | |
"The property sectors in Ireland and Northern Ireland continued to suffer from falling property prices. Property developers in particular struggled with lower property values. | |
"The drop in rents and the rise in vacancy rates squeezed earnings on rental property, which in turn reduced credit quality." |