DANSKE BANK may yet move to repossess assets in the State as the economy continues to struggle, its chief executive said yesterday.

While Danske has not yet repossessed any Irish assets, “that could be a possibility”, said Peter Straarup, chief executive at Danske Bank, which in 2005 acquired Northern Bank in Northern Ireland and National Irish Bank in the Republic.

He said he believed Ireland’s economy would not recover until 2011.

“Ireland is a depressing place to be, with a contraction of between 8 and 10 per cent this year and still negative growth of 1 to 2 per cent next year,” Mr Straarup said in an interview.

House prices, which quadrupled in the decade to 2007, have dropped as the country suffers its worst recession on record.

Before the crash Irish mortgage loans at the bank represented less than half the value of the properties they were used to buy, Mr Straarup said.

“I really don’t think we’ll have high losses on the personal customer side.

“We have no other plans than to work through this in Ireland.”

The Danish bank “has wiped off the blackboard” its aim to double earnings from markets outside Denmark in the five years to 2010 because of the economic crisis, as well as its goal to gain a market share of 10 per cent in those markets, Mr Straarup said.

Instead, the bank is “massively focusing on the credit books” and on managing the “difficult markets” at its units in the Republic, Northern Ireland and the Baltic countries, he said.

Danske, Denmark’s largest lender, may sell debt or new stock to shareholders or cut its dividend to raise the cash needed to pay back a loan from the Danish state, Mr Straarup said.

Danske Bank received 26 billion kroner (€3.5 billion) of subordinated loan capital from the Danish state earlier this year after deciding not to follow the lead of other Nordic banks in raising funds from shareholders to cover soaring loan losses.

The bank is well capitalised and has no plans for a rights offer at the moment, the chief executive said. – (Bloomberg)