Business

Danske chief warns of 'inevitability' of small business collapses post-Brexit

THE boss of the north's biggest bank says it is "absolutely inevitable" some small businesses across a whole gambit of sectors will go to the wall in the wake of a hard Brexit.

Danske Bank chief executive Kevin Kingston, speaking at a press conference in Belfast to reveal a 2018 bottom-line profit of £88.8 million, insisted the bank would be "as supportive as we possibly can" for firms seeking emergency funding.

But he cautioned that many businesses are vulnerable, labelling a no-deal Brexit as "the biggest risk to the Northern Ireland economy in a generation."

Mr Kingston said: "I am gravely concerned about the challenges ahead should a hard Brexit become a reality."

Danske Bank UK - which has 42 branches and three regional business centres employing a total of 1,328 staff - reported a full-year profit of £91.7m, with income (up two per cent to £235.1m), mortgage lending (up 16 per cent) and business lending (up four per cent) all showing improvements.

When loan impairment charges were removed, the bottom line profit was £88.8m, which was down 40 per cent on the year before (though the 2017 figure was inflated by two significant one-off gains).

The bank is growing on both sides of the balance sheet, with lending up eight per cent to £5.38 billion and deposits up seven per cent at £7.11 billion.

Mr Kingston lauded the bank's overall performance during the year especially in its strong lending to first-time home buyers (new mortgage lending was up 26 per cent compared to 2017).

Corporate and business banking was up 6 per cent as it reported funding support for the likes of Andras Hotel Group, Novosco, SHS, Devenish Nutrition, Westland and kitchen door and component supplier U-Form.

But the results announcement came with a pronounced caveat as Danske revealed its Brexit fears.

Mr Kingston said: "We have a strong insight into how thousands of local businesses operate, and we have engaged with many of them to help them plan.

"What we've seen is that larger businesses have been taking decisions to try to safeguard their operations.

"But smaller firms - which, of course, are the lifeblood of the economy in Northern Ireland - are vulnerable to what could happen after March 29."

Danske - whose parent company in Copenhagen is under investigation in Denmark, Estonia, Britain and the US over £180 billion of suspicious payments through its Estonian operation over an eight-year period - made another big play of its digital transformation.

“We've seen further adoption of our digital channels, with more than four million digital log-ons a month and a 35 per cent increase in digital transactions," Mr Kingston added

“We also launched a dedicated fintech co-creation space on the ground floor of our Belfast headquarters – the Catalyst Belfast Fintech Hub - and thehub.io, an online portal to help the growing number of start-up businesses in Northern Ireland to connect with investors, peers and potential new recruits across Europe."

At the end of this month (February 27) Danske will launch a polymer £10 note into local circulation, the first time it has introduced such a note since, as Northern Bank, it became the first ever UK bank to issue a ‘plastic’ note in December 1999 to mark the new millennium.