On the heels of disappointing third quarter results that were released today, Danske Bank has decided to sever ties with its personal customers in Ireland.
The bank will immediately end personal banking services for its Irish customers and refocus its efforts in the country on corporate clients. The bank said that existing personal banking customers will have their accounts subjected to a “winding down”, but promised to help Irish customers during the process.
“We will […] refocus our business in Ireland,” Danske Bank’s CEO, Thomas Borgen, said. “Going forward, we will focus on customers within corporates & institutions, where our international reach and solid experience provide a strong competitive edge."
The bank’s activities in Northern Ireland will not change.
Per Hansen, an analyst for Nordnet, told DR Nyheder that getting out of Ireland is a wise choice.
"Danske Bank made some historic blunders in the '00s, and the biggest was moving in to Ireland," Hansen said. "They are trying now to shut it down, but it will cost money."
2013 expectations downgraded
The changes in Ireland were announced with the bank’s third quarter results, which showed that the bank had a net profit of 5.2 billion kroner through the first nine months of the year.
"While our third-quarter result showed some progress, we continue to operate in a challenging environment,” Borgen said. “To stay competitive and deliver long-term value to customers and shareholders, we need to pay more attention to our customers, to simplify our operations and to become much more efficient.”
With the third quarter result, which Danske Bank said “does not live up to our ambitions”, the bank is downgrading its 2013 forecast from a net profit of 6.5-9 billion to 6-8 billion.
