Tuesday 17 October 2017

National Irish Bank name to disappear in Danske revamp

Laura Noonan

Laura Noonan

DANSKE Bank is shifting more than half of National Irish Bank's loans into a 'bad bank', eliminating the Irish brand name within weeks and merging its Irish operations with a separate bank north of the Border.

The dramatic announcements were made at Danske's first quarter results, when the Danish banking giant also revealed that NIB's long-running chief executive Andrew Healy was stepping down to consider "new opportunities".

The Irish Bank Officials Association called for an "urgent" meeting with NIB management as the bank refused to rule out job cuts as a consequence of the massive restructuring, saying numbers were "constantly under review".

Sources said there would be no immediate impact on jobs and that there were no planned redundancies. They also rejected suggestions that there would be branch closures -- even though the 'new' bank will focus heavily on online and telephone channels.

Danske carried out a major restructuring of NIB back in 2010, closing 25 branches and axing 150 jobs. Yesterday's overhaul is part of a group-wide project spearheaded by new chief executive Eivind Kolding.

On a conference call with analysts, he admitted that he would "like to" sell the €4.7bn of commercial and investment property loans being transferred into the Irish bank's new 'non-core' unit.

Impairments

"It's not really feasible at the moment and probably will not be for some time now," he said. "The main focus here is actually to recover as much as possible, not necessarily as fast as possible."

Yesterday's announcement also revealed that Danske is now pencilling another €670m to €940m of impairments its Irish loan book between April 2012 and the end of 2014, before things "normalise" in 2015.

"The Irish economy shows no prospect of material improvement," the Danish bank noted.

Danske has already taken almost €3.7bn of impairments on its €8.5bn NIB loan book, including another €195m of impairments in the first quarter of the year, driving a quarterly pretax loss of €184m.

Deposits at the end of the first quarter were down more than €1.4bn on the first quarter of 2012, while the bank's loan book contracted more than €700m.

Mr Kolding said that under the 'old' structure "resources and focus only goes to the problematic end of the bank".

"We missed the opportunities really to leverage what we have of positive things going for us," he said, adding that integrating NIB with Northern Bank in the north would also create "efficiencies".

Both banks will be rebranded as Danske on June 1. They will be split into operational units -- personal banking, business banking and corporates & institutions. All will report to Gerry Mallon, chief executive of Northern Bank.

Irish Independent

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