Danske Bank shrinks Irish losses to €201m

Danske Bank shrunk its Irish losses before tax to €201.5 million in 2014, down from €241m the previous year, as loan impairments fell by 29 per cent.

Denmark’s biggest bank, which announced its full-year results on Tuesday, continued its retrenchment in the Irish market in 2014, making “considerable headway” with the winding-up of its non-core Irish operations.

Total lending fell from DKK 53.7 bn (€7.2bn) to DKK 37.5bn (€5bn), and all transaction accounts were closed. After the first half of 2015, only the personal mortgage portfolio will remain on its books, the bank said.

Danske Bank operated a personal and business banking franchise in Ireland first under the National Irish Bank brand, and then its own, is currently downsizing its Irish operations by quitting retail banking with a view to focusing on servicing larger corporates.The figures show that 101 people were employed by the bank in Ireland at the end of 2014.

Terry Browne, country manager and head of corporate & institutional banking at Danske Bank Ireland, said, “In the past 18 months, we have successfully refocused our business in Ireland and are now concentrating our efforts on leveraging our technology and advisory expertise to deliver a superior service to corporate and institutional clients.”

The group saw losses in its non-core portfolio, which mainly consists of non-core Irish portfolio, fall to DKK1.5bn, down from DKK1.8bn in 2013, as impairments fell by 29 per cent to DKK 0.9bn.

“The improved Irish property market resulted in net reversals of previously made individual impairments,” the bank said. In respect of the bank’s commercial and residential investment property portfolio, property sales increased significantly and totalled 1,634 properties.

“Most of the properties in the remaining portfolio (1,589 properties) are on the market, under offer or disposed off subject to contract,” the bank said.

According to Danske Bank, “loan impairments are expected to remain at a lowlevel”, as going forward its non-core business in Ireland will consist of the personal mortgage portfolio only (DKK17.4bn) and “will therefore no longer have any significant effect on the profit and loss”.

Servicing of the portfolio has been outsourced and the portfolio will mature according to contractual terms, the bank said.

Group results

Overall, Danske Bank reported net profit of DKK 3.8 billion (€516.7m), which was affected by goodwill impairments of DKK 9.1 billion (€ 1.2bn). Before these impairments, net profit rose 82 per cent to DKK 12.9 billion (€1.7bn), against DKK 7.1 billion (€953.7m) in 2013 and DKK 4.7 billion (€633.3m) in 2012.

“The increase was driven by growth in all income lines, lower expenses and lower loan impairments,” the bank said.

Thomas F. Borgen, chief executive office of Danske Bank said that the bank has made progress.

“Although we still have some way to go to meet our ambitions and realise the full potential of Danske Bank, the progress confirms that we are on track to deliver on our targets. We will continue to diligently execute our strategy to become a more customer-centric, simple and efficient bank for the benefit of both customers and shareholders.”