Danske Bank shake-up fuels talk of bank sale in North
Danske’s shares rose more than 4% to their highest since July 2007 and were one of the biggest gainers in the FTSEurofirst 300 index. Denmark’s largest bank by market value has had to cut costs to cope with slow growth rates in its main market, Denmark, after a property bubble burst and has sought market share in countries such as Norway and Sweden.
It now plans to run its business in the North, which operates under the Danske Bank brand, as a standalone business. It has a market share of 20% in personal banking in Northern Ireland and 28% in business banking.
“We have made a business review that concluded that synergies between the Northern Irish market and the Nordic markets are limited,” the bank said in its results statement, adding that the changes aimed to improve profitability.
“They are making the bank in Northern Ireland ready to be sold and it make good sense,” analyst Christian Hede from Nordea Markets said.
A Danske Bank spokesman said in response to the speculation: “We are happy with our activities in Northern Ireland and have no plans to sell.”
In the Republic, Danske continues to run down its retail and mortgage loan books and focuses instead on large corporate and institutional business. Terry Browne, country manager and head of corporate and institutional banking at Danske Bank Ireland, said the recovery in the economy had boosted its operations.
The group boosted second-quarter profit by 13%, helped by a fall in loan losses, paving the way for an increase in its 2015 net profit outlook to more than 16bn Danish crowns (€2.14bn).
The group’s pretax profit rose 13% to 5.81bn Danish crowns for the three months to June 30, beating a forecast of 4.86bn.
Its loan book increased in Norway and Sweden, while it fell in Denmark versus the first quarter.
Reuters with additional reporting by Irish Examiner staff
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