The potential for US tariffs to impact firms here remains a “wait and see” situation amid uncertainty for some companies, according to bank chiefs.
It comes as Danske Bank revealed its annual results – posting pre-tax profits of £218.2m for 2024, up 17%, with deposits and loans both up year-on-year. Deposits rose from £10.7bn to £11.4bn.
The bank saw mortgage approvals rising by more than a third, with more than 60% of those opting for two-year fixed rates. That demand for shorter-term fixed rate mortgages is expected to increase amid further predicted interest cuts on the horizon.
It also welcomed 16,000 new current account customers, along with 1,500 new small businesses – up two-thirds, year-on-year.
Turning to the marketplace and the challenges ahead, on the issue of potential trade tariffs with the US – President Donald Trump has already imposed tariffs on China – Danske Bank chief executive Vicky Davies said:
“The concern is the impact on our customer base – those who are trading to a large degree, directly with the US, or being part of a parent company. It’s very much a watch and see.
“It’s part of customer conversations with our relationship managers, but we don’t have a ground swell of businesses [bringing concerns]… it’s too early to judge.”
Stephen Matchett, deputy chief executive and chief financial officer, said “tariff is the word of the moment”.
“That’s creating a huge amount of uncertainty out there,” he said. “The negative of that is stalling investment and potentially stalling growth.”
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On its own results, Ms Davies said it was a strong year for Danske Bank – with increased income driven by lending and deposits in a high interest rate environment
And on the housing market, Richard Caldwell, managing director, Great Britain and corporate strategy, he said it remained strong, with rising prices and strong demand “underpinned by low unemployment”.
“We had record level of mortgage approvals in 2024 – £730m,” Mr Caldwell said. “That’s really strong – we are up 35% year-on-year.
“We are seeing more customers moving to two-year fixed… 63% took a two-year.
“We expect that to continue in an environment where rates are going to fall.”
He said the average age of those taking out their first mortgage had gotten “a little bit older”.
The bank continued to invest, including in its digital infrastructure, according to Mr Matchett.
Ms Davies says that with some business concerns over the future economic landscape, including the impact of the Autumn Budget, that despite higher deposits among firms they may not “move things to the front burner”.
“It all comes down to confidence, for businesses, homeowners, to a degree, having the confidence to put on the front burner things they may have put on the back burner.
“I don’t think the environment at the moment means that we will see a significant shift in that… but that untapped potential is definitely there.
Looking ahead, Ms Davies said the latest results for the bank “leaves us entering 2025 in a very strong financial position”.
Bank of England cuts interest rates to 4.5%