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| Version 1 | Version 2 |
|---|---|
| Losses increase at Northern Bank | Losses increase at Northern Bank |
| (about 4 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. | 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. | "Loan impairment declined somewhat from the third to the fourth quarter," they said. |
| Northern Bank have enough deposits to cover all their lending. | |
| The problem comes because they have had to write down the value of the loans they made to buy land. The value of land has dropped by as much as 90% in some areas since the peak of the boom. | |
| This year the bank have been able to measure the actual value of property for the first time. Sale of land by other banks has shown just how little much of their loans are now worth. | |
| Northern Bank's chief executive Gerry Mallon said they are trying to flush out those bad property debts as quickly as possible, and get back into profit. | |
| "Charges remained high, though, primarily because commercial property prices fell. | "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 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 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." | "The drop in rents and the rise in vacancy rates squeezed earnings on rental property, which in turn reduced credit quality." |
| Northern Bank have already announced four branch closures for 2012, but chief executive Gerry Mallon said "inevitably it will be more than that". | |
| In terms of lending, Northern Bank say their mortgages have increased by 2%, but their loans to businesses have dropped by 11%. |