07 Feb 2014

Danske set to sell 600 buy-to-let properties

Filed under: Business News

DANSKE Bank is rumoured to be on the cusp of selling about 600 buy-to-let properties around the country belonging to owners in mortgage arrears.

Such a sale could either bring hundreds of houses onto the rental market or test the property market, which is currently seeing prices rise in some areas thanks to a shortage of properties for sale.

The bank pulled the plug on its Irish consumer operation late last year, although it will continue to serve corporate customers.

Bloomberg reported last night that the Copenhagen-based lender is looking to sell the homes in one batch.

The original owners bought the properties as investments, or buy-to-let homes, before defaulting on their debts.


Danske’s plans come as overseas investors, including Kennedy-Wilson Holdings, are snapping up Irish property as they bet on a recovery in prices.

A Danske spokeswoman in Dublin declined to comment on the potential sale.

The Danish bank is exiting retail and business banking here as well as winding down its property investments.

The mooted sale comes as Danske said the financial crisis in Ireland and Denmark is over.

Chief executive Thomas Borgen acknowledged the bank’s results remain unsatisfactory, with customer numbers still falling after a failed advertising campaign in the autumn of 2012, which further damaged the bank’s already bruised image after the crisis.

But Mr Borgen pointed out that the decline had slowed in the fourth quarter.

A 27pc rise in fourth-quarter pre-tax profit missed the average forecast in a Reuters poll, but net interest and fee income were better than expected. Danske is now set to issue its first dividend since the crisis began.

“Our financial results improved but they were still unsatisfactory,” Mr Borgen said.

Danske Bank’s shares have been performing almost in line with the STXE 600 European banking index over the past six months, while its Swedish rivals have outperformed.

Shares in the bank closed up 3.7pc yesterday.

Danske Bank reported a fourth-quarter pre-tax profit of 2.86bn Danish crowns (€383m) compared to 2.26bn a year earlier.

The bank, Denmark’s largest, said it expected after tax profit of between 9bn and 12bn crowns in 2014. (Bloomberg, with additional reporting by Reuters)


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