Belfast Telegraph

Danske plan leaves 1,000 jobs in the balance

By Clare Weir

It is not yet clear whether 1,000 new redundancies announced by Danske Bank Group will impact workers at Northern Bank.

The Danish lender, which owns Northern Bank, announced a huge restructuring plan yesterday which includes raising more equity by selling shares, streamlining operations, closing branches and automating customer service.

The company said that the move will lead to a headcount reduction of around 2,000 in the period 2013-15, in addition to the reduction of around 1,000 expected in 2012.

That represents a further reduction of around 1,000 people compared to the company's previous statements.

Danske Bank Group has said that personal banking will undergo the most radical changes, saying that the conventional branch distribution model is "rapidly becoming obsolete" as customers choose digital channels.

A spokesman for the firm wouldn't be drawn on where the cuts would take place. The company currently employs around 21,000 people in 15 countries.

"Over the past few years our employee numbers have reduced gradually as we have been transforming our business," he said.

"In particular, customers have higher expectations for electronic banking and have been using branches much less.

"This trend will continue as we adjust our business to meet changing customer service needs. The group announcement regarding reduction in headcount reflects that fact of life, and any adjustments that there are will be managed gradually through careful resource planning."

Meanwhile one of the Group's interests in the Republic is also to undergo big changes with the "non-core Ireland portfolio" being divested.

This will mean that a special unit will be set up to take over National Irish Bank's 'bad' loans.

"In June of this year, Danske Bank established a separate non-core unit to manage National Irish Bank's commercial and investment loan portfolios," the spokesman continued.

"This move is viewed as the best option in terms of maximising the return for our shareholders from the non-core loans.

"Current market conditions in the Republic of Ireland are such that we believe the recovery on this portfolio will be optimised by working out the assets over the medium term rather than a short-term fire sale of assets."

Meanwhile, shareholders have been told that no dividend payment will be proposed for 2012.