Belfast Telegraph

Danish bank agrees to purchase Northern

By Nigel Tilson, Business Editor

Denmark's largest bank is the new owner of Northern Bank.

Denmark's largest bank is the new owner of Northern Bank.

Danske Bank today agreed to buy the Belfast-based bank and National Irish, its sister operation in the Republic, for £967m.

And it revealed it will spend £100m over the next 15 months on introducing a new technology platform in the two banks.

The existing IT platform, which is based in Belfast, had proved a stumbling block to previous suitors who claimed it was not up to scratch.

Danske said its own technology platform would be implemented in the two banks in 2006, enabling it to offer "a completely integrated range of services" to Northern and NIB customers.

The £967m deal, which also covers the Irish banks' activities in the Isle of Man, falls slightly short of NAB's asking price, which is believed to have been £980m.

The two banks have effectively been on the market since October when NAB called in London investment bank Lazard to promote a possible sale.

Last month Halifax Bank of Scotland is believed to have offered £700m for the two banks, but NAB firmly rejected the offer.

Don Price, the current chief executive of the two banks, is to remain in the role and is expected to join Danske's executive committee, while Peter Straarup, chief executive of the Danish bank, will become chairman of the two Irish banks.

In an announcement to the Danish Stock Exchange today, Mr Straarup said the acquisition supported the Copenhagen-based group's ambition to expand its branch network outside Denmark.

He said ownership of the banks would enable it to "utilise the group's competencies, in particular regarding our product range, efficient and centralised working processes, and highly developed technological platform".

National Australia Bank chief executive John Stewart said the deal was "an excellent outcome" for NAB, which has operated the two banks since 1987.

"We have achieved an attractive price for these banks, generating a significant profit and strengthening our capital base," he said.

Northern currently employs around 2,300 people in 96 branches across Northern Ireland, while National Irish has 59 branches in the Republic, employing just under 800 people.

The deal was welcomed by finance union IBOA, which said it was "a positive development that will bring a sense of welcome relief to staff".

General secretary Larry Broderick said: "Staff in both banks have gone through a traumatic few months of insecurity with endless rumours about the impending sale of the banks and uncertainty about their jobs.

"We very much welcome today's announcement as it ends the ambiguity about the future of the banks and at least staff now know what the future holds."

He also said IBOA would be discussing the sales process with senior management from NAB and Danske Bank in the coming days in a bid to ensure that jobs are protected.

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