Northern Bank brand to be scrapped
Ex-chief warns of 'big risk' as Danske renames 200-year-old institution
A former Northern Bank chief has said that it is taking a "big risk" in rebranding under the name of its parent Danske Bank.
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Northern Ireland's second biggest bank will be completely rebranded as Danske by the end of 2012, with notes bearing the new name to be in circulation in around a year's time.
Northern Bank, the roots of which go back 1809, will merge its personal and business banking divisions with their equivalent in sister institution National Irish Bank. Around £3bn in commercial and investment property loans at NIB will be hived off into a separate unit which will then be wound up.
Danske chief Eivind Kolding said: "It is not without sadness that we say goodbye to the Northern Bank brand name and replace it with Danske Bank.
"Northern Bank is a long-established and well-respected brand, but with our new organisational set-up, our overall ambition is to create an even better bank for our customers that is internationally recognised for its strength and expertise."
Banks in Sweden, Norway and Finland are also to be rebranded in the image of their parent.
Shares in Danske Group were up over 1% at close of play yesterday as markets reacted positively to the move.
But former Northern Bank chief executive John Wright, who was in charge from 1993 to 1997, said that abandoning the name was not the right move.
"I think that it is really unwise from a business point of view to bin a brand that has built up its position over the past almost 200 years."
However, he said merging divisions with National Irish Bank "makes nothing but sense".
"We started that process in 1997 and the Danes in their wisdom reversed it post acquisition. They have now gone full circle."
Bank rebranding has some precedent in Northern Ireland, Mr Wright said. "TSB was rebranded as First Trust Bank in 1993. HSBC has done this successfully all round the world in the past 10 or 12 years."
He added: "I think it's a big risk to take in Northern Ireland where the history and memories are very long."
But Northern Bank chief executive Gerry Mallon said the rebranding was "less a case that the Northern brand is going than that the Danske brand is coming".
"It's a demonstration that Danske Bank has a long-term faith in the economy and it's staking a claim to be here."
Mr Mallon said that it would take some investment to replace "a well-recognised brand with one that had relatively low customer recognition".
Mr Mallon, who was appointed in 2008, said the bank would still report separate results for Northern Ireland and Republic.
He said the bank was in discussions with the Bank of England about the phasing out of Northern Bank's notes and the eventual issue of Danske Bank notes but it would take "a year at best".
From June 1, Mr Mallon has responsibility for personal and business banking across the island of Ireland. "It's definitely additional responsibility but it makes sense on a relatively small island to think about operating as one team serving our retail customers."
- In 1809, Northern Bank began as a Belfast-based banking company known as the Northern Banking Partnership. The bank expanded across Ireland, opening its first branch in the south in 1840.
- In 1970, the Northern Banking Company Limited amalgamated with the Belfast Banking Company Limited to form Northern Bank Limited.
- Until 1988, the bank was a subsidiary of the Midland Bank.
- In 1988, both Northern Bank Limited and Northern Bank (Ireland) Limited were acquired by National Australia Bank.
- In 2005, the Danish-based Danske Bank Group acquired the bank.