One of Northern Ireland’s biggest banks has recorded a pretax profit of nearly £80 million in the first nine months of this year.
Danske Bank UK said its improved performance, which is a jump of some £30 million on the same period last year, is the result of a “increased transactional activity” and higher UK interest rates. It said it expected rates to continue rising in the fourth quarter of the year, having already been raised by the Bank of England in quarter three to 2.25% from 1.25%.
Deposits also remained at record high levels, the bank said, despite widespread inflation, although it said they were beginning to flatten.
“Households' purchasing power is being squeezed by high inflation and we expect that some of our customers will use the deposits they built up during the pandemic to help with the increased cost of living over the winter months,” Vicky Davies, CEO of Danske Bank UK, said.
The bank said it was focused on helping customers through the cost-of-living crisis, and in particularly the threat of further rises to interest rates.
Borrowers coming to the end of fixed rate mortgage deals are expected to be particularly hard hit by the increase in rates, although long term rate expectations have eased in light of Rishi Sunak’s move to become UK Prime Minister.
Vicky Davies said there is little certainty in the wider economic outlook.
“The economic outlook for the UK remains uncertain, and during these challenging times, Danske Bank’s priority will be to focus on ensuring we are there for customers when they need us.”
