Danske chief 'hopes' NIB's €221m loan impairments have peaked
Published 13/08/2010 | 05:00
DANSKE Bank chief executive Peter Straarup has told investors he "hopes" loan impairments at National Irish Bank have finally peaked, adding that there's cause for "optimism" around the Irish economy.
National Irish Bank (NIB), which trades as the Irish branch of Danske, reported second quarter loan impairments of €221m earlier in the week.
On an analysts' call it emerged that the quarterly hit was the worst ever booked by NIB, though Irish impairments fell marginally over the first-half of the year.
The revelation dismayed analysts who'd been primed for improving trends, and NIB's performance dominated a Danske earnings call on Tuesday.
"I would hope that the levels peaked in the second quarter here," Mr Straarup told analysts, as he faced down questions on why bigger Irish banks are already reporting falling loan losses.
He added that the latest losses, which were more than 50pc higher than those booked in the first quarter of the year, had been taken "based on the latest developments" in the Irish market".
"Our indication on the property market in Ireland is that it's soft . . . softer that we have expected," Danske chief financial officer Tonny Thierry Andersen told analysts.
"We felt that there was a disappointing development and liquidity in the market was not very strong, so that's the reason (for the higher markdowns)."
The duo declined to be drawn on future writedowns, but said the picture would improve based on commercial real estate conditions and macroeconomic trends.
"The Irish market is seeing some economic recovery as far as the macroeconomic developments are concerned and that gives ground for some optimism," Mr Straarup (above) said.