Pre-tax profits at Danske Bank slumped by over 80% to £13.1m last year as the Covid-19 pandemic took its toll.
nnouncing its full year results on Thursday, the bank said operating profit was down 36% from £90.8m to £58.5m.
But after the bank had made £45.4m allowances for bad debts – known as loan impairments – pre-tax profits were down 85% from £90.8m in 2019 to £13.1m.
Despite the financial crisis, deposit growth was up 27% year on year as many personal and business customers focused on paying off debt and building up cash.
The bank said the amount of loan impairments had been greatly increased “to allow for the potential that a growing number of customers will experience financial difficulties over the months ahead”.
Approved coronavirus support loans amounting to over £450m for 10,000 customers, of which £395m was goverment-backed lending, and granted 5,300 mortgage payment holidays.
There were another 675 payment holidays granted for credit card and personal loan customers.
Across 2020, there was also a 34% increase in digital transactions
Chief executive Kevin Kingston said the bank had not been immune to the negative financial impacts of the pandemic. “Combined with a record low interest rate environment and Brexit uncertainty, 2020 proved to be a particularly challenging year.”
He added that challenges facing the bank and society “will be with us for some time”. “The good news is that the local economy has avoided the implications of a no-deal Brexit, albeit there is still a lot of work to do in terms of embedding the new trading arrangements.”
Read More: Danske Bank pre-tax profits slump by over 80% as pandemic takes toll