Danske Bank will not repeat Irish ‘mistake’, says Fitch

Fitch, one of the world’s largest credit ratings firms, said Danske Bank has learnt its lesson from its disastrous foray into the Irish market more than a decade ago.

“We believe past mistakes such as the expansion into Ireland are unlikely to be repeated,” Fitch said in a note this week where it affirmed its A rating and stable outlook on the Copenhagen-based bank.

Danske Bank group’s “level of impaired loans has fallen in recent years on the back of a domestic economic recovery, enhanced underwriting standards and ongoing wind-down of the non-core Irish portfolio, which is no longer a material risk to the bank”, it said.

Danske, which entered the Irish market in 2005 through the purchase of National Irish Bank and Northern Bank in Belfast, decided three years ago to exit the retail and banking business in the Republic of Ireland after racking up massive bad-loan losses during the financial crisis.

The group decided the previous year, in 2012, to put its commercial property assets into an internal bad bank.

The group has been selling off Irish assets ever since, with the Sunday Times reporting on August 18th that US private equity firm Cerberus has bought a large part of its remaining retail book. The portfolio, known as Project Pluto, includes owner-occupier and buy-to-let mortgage and unsecured personal loans.