Danske Bank has announced a substantial 80% surge in its pre-tax profits, reaching £186m in 2023, with the rise attributed in part to the increasing interest rates, which were kept steady at 5.25% by the Bank of England on Thursday.
The leap in interest rates from 3.5% at the beginning of 2023 to 5.25% by year’s end has led many to speculate that rates have reached their zenith.
Vicky Davies, the UK chief executive of Danske Bank, suggests this could signal a resurgence in the housing market for the coming year.
“I think our feeling is the direction of travel is that we will see more activity in the mortgage market, in terms of house sales and mortgage lending,” she stated.
“The degree to which this happens is always hard to judge but that’s our expectation: a little bit more activity and buoyancy in the year ahead, noting the challenges, as always, for consumers – and uncertainty.”
Davies noted that while 80% of Danske’s mortgage clients have chosen fixed-rate mortgages, there’s been a noticeable shift towards two-year fixed rates over five-year ones, indicative of the belief that interest rates may not climb further.
Moreover, Davies expressed her desire for environmental sustainability to be a primary focus for the newly appointed ministers at Stormont.
“Northern Ireland has set ambitious climate targets for 2030. I think it’s really going to be vital that we have the incentives and the support to help businesses and consumers to transition and I hope that’s one of the priorities on the executive’s to-do list,” she remarked.
