Ulster Bank reports £314m loss
The Ulster Bank has announced losses of £314m for the first half of the year.
Although its operating profit increased to £185m, that was wiped out by £499m set aside to cover bad loans. The bank's results relate to the island of Ireland.
Meanwhile its parent company, the Royal Bank of Scotland (RBS) announced pre-tax profits of £1.1bn
Ulster Bank chief executive, Cormac McCarthy, said operating profit before loan losses increased by 21% to £185m.
"Reflecting the market environment in which we operate, our results include a significant charge for impairment resulting in an overall loss of £314m," he said.
This compares to a loss of just under £8.3m the same time last year and the bank said it represented a "significant deterioration" in its financial performance.
It said it was setting aside £499m for its bad loans - up significantly from £157m at the same time last year.
Most of those impairment charges relate to property and other business lending.
Ulster Bank was the only divison of RBS to report a higher level of impairments in comparison to the same period in 2009.
The figures also show a big rise in impaired Ulster Bank loans being held in the RBS non-core division.
It is the part of RBS which is managing the sale or run down of assets and businesses which the bank no longer want to invest in.
At the end of the first half of 2010 it was holding over £1.2bn of Ulster Bank loan losses compared to £484m at the end of the first half of 2009.
Mr McCarthy said the economic backdrop and outlook in Ireland remains challenging.
However, he said the bank had taken "decisive action" to adapt to the changes in the marketplace, resulting in "a significant improvement" in the performance of the underlying business.
Staff costs at the bank have fallen from to £126m for the first half of 2010 compared to £170m in the same period last year.
One important measure of the bank's efficiency, the cost-to-income ratio, has improved significantly over the year.
Mr McCarthy reiterated that Ulster Bank is "a core part of RBS" and said the bank, was "fully committed to supporting the needs of our 1.9 million customers across the island of Ireland."
The banking sector across Ireland has been badly hit by the bursting of a property bubble.
Earlier this week AIB reported a half year of 2bn euros with its Northern Ireland business, First Trust, losing £52m.