Danske Bank's pre-tax profit rises to £44m

The bank said the mortgage market remained 'healthy' with new lending approvals up 38% year on year.

Danske Bank in Northern Ireland made a pre-tax profit of £44m in the first half of 2022, up by 15% on the £38m reported in the same period last year.

The bank said the mortgage market remained 'healthy' with new lending approvals up 38% year on year.

Customers appear to be reacting to the prospect of rising interest rates by choosing fixed rate deals.

More than 90% of Danske's new mortgages in the first half of the year were fixed rate with 62% on a five year fix.

The Bank of England has been raising interest rates in response to surging inflation.

This week, the bank's governor Andrew Bailey said rates could increase by as much as 0.5% at the next rates meeting in August.

For at least the past seven years the bank has only dropped and raised rates in 0.25 percentage point increments.

'Act Forcefully'

Mr Bailey said in a speech at Mansion House that a 50 basis point rise - from 1.25% to 1.75% - will be one of the options for the Monetary Policy Committee when it next decides on rates on 4 August.

"At the MPC's last meeting we adopted language which made clear that if we see signs of greater persistence of inflation, and price and wage setting would be such signs, we will have to act forcefully," he said.

"In simple terms this means that a 50 basis point increase will be among the choices on the table when we next meet.'

Meanwhile Danske says the cost of living crisis is not yet having an impact on the ability of customers to repay loans.

In the first half of the year , the bank made a loan loss provision of just £4.4m- that is money that has to be set aside to cover loans which look unlikely to be repaid.