Danske Bank deposits soar to £10.5bn... now it will move in on GB

Danske Bank said it plans to expand some of its services to Britain this year
Danske Bank said it plans to expand some of its services to Britain this year

DANSKE Bank has outlined plans to expand its services into Britain for the first time - though this won't immediately involve adding to the network of 32 branches it currently operates in Northern Ireland.

Chief executive Vicky Davies confirmed that the north's biggest bank will “pursue small pockets of opportunity for growth” outside what has been its traditional patch for close on 200 years.

But she insisted: “Northern Ireland will always be our primary focus and is our heartland, but the terms of our licence do allow us to operate in any part of the UK, which we're now exploring.”

Already, Danske has loaned £300 million to the social housing sector in England, as well as being active in the syndicated lending space.

On the personal banking side, it has launched its carbon neutral mortgage through a number of select brokers in the south of England, and this will be a particular area of targeted growth for the bank going forward.

Ms Davies was speaking as Danske, which has a staff of 1,400, posted a pre-tax profit of £61.3 million in 2021, up from £13.1m in 2020.

Its total income dropped by 2 per cent from £203.2m to 198.2m while the bank saw its expenses rose by £7m to £151.6m.

Central to Danske's impressive performance was that, given the improving economic environment, its loan impairment provision was slashed, and after setting aside £45.4 million in 2020, that became a credit of £14.6m last year.

The results also showed that customer deposits soared over the year - £534m from personal customers and £421m from corporate and business customers.

It means customer deposits were sitting at a record £10.5 billion at end of year, which is a £3 billion uplift on the figure at the beginning of 2020.

Ms Davies described 2021 “challenging”, characterised by the impacts of the pandemic and uncertainty arising from the end of the Brexit transition period.

But she added: “The results reflect an improving economic outlook, and we continue to support customers and focus on helping Northern Ireland grow again.”

On returning to growth in Northern Ireland, Ms Davies said: “The housing market remained buoyant in 2021 and we supported home-buyers and mortgage switchers by providing competitive products and simplifying our processes.

“We became one of the first banks in the UK to reintroduce 95 per cent loan-to-value mortgages, and followed this by launching the UK’s first mortgage to be certified as carbon neutral by the Carbon Trust.

“We increased our maximum mortgage term from 30 to 35 years to help more customers, particularly first time buyers, as they seek to secure their first home.

“Small business lending, excluding government-backed support loans in 2020, was up 9 per cent year-on-year and is approaching pre-pandemic levels. Lending to larger businesses remains more subdued, due to many organisations carrying excess liquidity and some delaying growth plans.”

Looking ahead, Ms Davies highlighted a number of challenges that could affect the north's economy, including the impact of coronavirus variants, political instability, high inflation, supply chain disruption and labour shortages.

And she said that hen it comes to the pace of economic recovery, much will depend on pent up economic capacity turning into consumer spending and business investment.