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Danske denies plan to sell on Northern Ireland operation

By Colm Kelpie and John Mulgrew

Published 23/07/2015

Evidence: Economist John Simpson
Evidence: Economist John Simpson

Danske Bank has denied that internal changes to the status of its Northern Ireland operation could be part of plans to sell it on.

The operations here -which yesterday reported profits of £65m for the first half of the year - will become a standalone business unit instead of part of the Danish giant's personal banking and business banking.

The move takes effect from January and Danske Bank Northern Ireland will be disclosed in financial statements as a separate business unit.

The move sparked speculation that the Northern Ireland operations were being primed for sale. Danske's takeover of then-Northern Bank was completed in 2005.

"They are making the bank in Northern Ireland ready to be sold and it makes good sense," analyst Christian Hede from Nordea Markets said.

In response, a Danske spokesman said: "We are happy with our activities in Northern Ireland and have no plans to sell."

Danske's report said there were "limited" synergies between Northern Ireland and its Nordic markets. Danske in Copenhagen said: "We have made a business review that concluded that synergies between the Northern Irish market and the Nordic markets are limited, and we are confident that the change will better enable us to create value for our customers in Northern Ireland, to develop our market position and to improve profitability."

Economist John Simpson said: "The evidence is that Danske Bank in Northern Ireland has been very much under the wing of and tightly supervised by Danske in Copenhagen. But under the new arrangement Danske Bank here would be more independent.

"That could be good for the economy - and now we need a statement from Danske in Northern Ireland on how they intend to use the new freedom."

Danske in Northern Ireland has insisted there are no plans for further branch closures as it posts pre-tax profits of £65m for the first six months of 2015. That's up from £37.4m a year before, thanks to factors such as writebacks, in which cash is clawed back from loan impairments.

The bank's general operating profits also rose by almost a third to £42.6m, up from £33.2m. It comes after Danske posted record pre-tax profits of £117.5m in 2014, in a year which saw it close an additional seven branches.

Deputy chief executive Kevin Kingston said the bank had witnessed a significant upsurge in its business banking arm.

The bank also topped this year's Belfast Telegraph Top 100 Companies.

Mr Kingston said: "The big message for me is the uplift in the lending," he said.

"It is a genuinely encouraging message for us and the whole economy as well.

"On the business side we have lent as much money as we did in the whole of 2014, and that's a dramatic increase."

Belfast Telegraph

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