Danske to sell large portion of Irish 'book'
Published 03/05/2013 | 05:00
DansKe Bank says it plans to sell a large share of its "book" of troubled Irish property loans by the end of next year, after announcing fresh losses here in the first three months of the year.
Last year the bank shifted DKK35bn (€4.7bn) of loans at its National Irish Bank unit into a so-called "non-core unit" to be wound up. Now the plan is to sell off the loans, the chief executive of the Irish unit's Danish parent said.
"The aim is that the portfolio will be significantly reduced by end-2014," chief executive Eivind Kolding said.
"We see increasing interest in taking over properties and struggling engagements, so we are pretty confident that we will see a significant reduction," he said.
Yesterday Danske Bank Ireland reported losses of €8.8m in the first three months of this year in relation to its "core business" here.
The latest Irish losses include writing down the value of some assets in the so-called core unit. The amount of cash on deposit at the bank in Ireland rose by 12pc in the period to €3.4bn.
Costs were down by 5pc in the period.
The latest Irish losses are down from €15m in the previous three-month period, on a like-for-like basis.
However, the bank's Copenhagen-based parent is under pressure as its net income is being squeezed by the country's ultra-low interest rates and low demand for lending in its home market.
The parent bank plans to pay a "small dividend" for 2013.
The bank has raised capital and laid off staff to turn around the business, but Mr Kolding said yesterday that it would reduce the Irish loan book further and look at more options to cut costs and increase earnings.