Danske pledges to make its Irish arm work
DANSKE'S international boss yesterday said his bank would "never" have bought National Irish Bank if they had foreseen the property crash, but insisted they would "make it work" and create shareholder value from their Irish operations.
Thomas Borgen's comments came the day after the Danish plc announced it was ditching the NIB name, merging the Irish bank with Northern Bank and moving €4.5bn of property loans to an internal run-down unit.
Mr Borgen stressed the "key message" from Danske was "we remain committed to Ireland". He said putting the Danske name over the door was a sign of their commitment because they would not "risk" the Danske brand if they were planning a withdrawal.
NIB's departing boss Andrew Healy also insisted there are "no plans for job cuts" as a result of this week's announcement, adding that the bank would be "happy" to meet with the IBOA trade union.
Mr Borgen said that if Danske had known what was going to happen in the property market they would "never" have bought NIB.
"We're here now, and we're going to make it work," he said.
Danske believes the Irish operation could still be "value creating for our shareholders".
The 'core' NIB will begin life with loans of about €4bn. Mr Borgen said they did not have a "target asset size" for the core business, but said they would like to have a bigger book "in a couple of years".
Corporate institutions are, "by definition", where the greatest growth will come from because single deals there are the biggest. Mr Borgen said Danske was also keen to extend more mortgages and personal credit, but would not "compromise" its credit standards.
"I don't believe in old-fashioned banking, I believe in modern banking," Mr Borgen said, adding that Danske was the first bank to launch an 'app' in Ireland.
Mr Borgen said the challenge now was "to make sure everyone knows about it".
NIB is expected to be rebranded as Danske Bank Ireland.. Mr Borgen said details on the exact name format, or the market effort around it, had not yet been decided.