Fitch says Danske Bank’s Irish ‘mistake’ will not be repeated

Fitch, one of the world's largest credit-ratings firms, said Danske Bank has learned its lesson from its disastrous foray into the Irish market more than a decade ago.

“We believe past mistakes such as the expansion into Ireland are unlikely to be repeated,” Fitch said in a note where it affirmed its A rating and stable outlook on the Copenhagen-based bank.

Irish portfolio

Danske Bank’s group “level of impaired loans has fallen in recent years on the back of a domestic economic recovery, enhanced underwriting standards and ongoing wind-down of the non-core Irish portfolio, which is no longer a material risk to the bank” it said.

Danske, which entered the Irish market in 2005 through the purchase of National Irish Bank and Northern Bank in Belfast, decided three years ago to exit the retail and banking business in the Republic of Ireland after racking up massive bad loan losses during the financial crisis.

The group has been selling off Irish loans and assets ever since, with the Sunday Times reporting on August 14th that US private equity firm Cerberus had bought a large part of its remaining retail book. The portfolio, known as Project Pluto, includes owner-occupier and buy-to-let mortgage and unsecured personal loans.