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Organisational changes at Danske Bank

Company Announcement No. 7/2012

Danske Bank creates a new organisation structured around three business units: Personal Banking, Business Banking and Corporates & Institutions. The three units will operate across all the Group’s geographical markets. The new organisation will take effect on 1 June 2012. The Group’s financial reporting will reflect the new organisational structure with effect from 1 January 2013.

“With our new organisation, we push decision-making closer to our customers,” says Eivind Kolding, Chairman of the Executive Board. “This shift will make business operations simpler, faster and more agile. Our overall ambition is to create an even better bank for our customers, to cut costs and to provide the basis for improving our financial results.”

The new business units will be in charge of customer relations, credit granting, business development, communications and marketing for their individual unit. Group support functions will be streamlined to support the business units. Group IT and Group Operations will continue as group support functions and will report directly to the Chairman of the Executive Board.

The new organisation is the first step in a new strategy for the Danske Bank Group. The preparation of a new Group strategy continues, and the work is expected to be completed by the end of Q3.

One name in all markets
In the new organisational set-up, the Group will market all its banking operations under the Danske Bank brand name. The rebranding process will be completed by the end of 2012.

“What determines our customers’ needs is first of all whether they are personal customers, small- or medium-sized businesses, or large international groups,” says Eivind Kolding. “That is why we pool our resources under one name and focus on delivering the best solutions to our customers across geographical markets. This will make us more agile and speed up the process of developing and marketing new products across the organisation. The overall goal is to deliver unsurpassed customer experiences and build a strong brand with customer appeal in all our markets.”

The Irish banking operations
At National Irish Bank, all loans financing commercial and investment property will be transferred to a new, separate entity for the purpose of optimising the value and ensuring a controlled winding-up of this part of the loan portfolio. The loans represent a value of DKK 35 billion, or 56% of National Irish Bank’s loan portfolio. The Group’s financial reporting will reflect the split of the loan portfolio from 1 January 2013 at the latest.

Northern Bank and the continuing part of National Irish Bank will be fully integrated into the new organisation under the name of Danske Bank. Danske Bank’s products and services are still market leading in Ireland and Northern Ireland and remain popular among customers. The full attention to the sound part of the Irish operations will benefit both the customers and the bank.

“Danske Bank has considered alternative options and decided that this solution is the best in terms of creating value for our shareholders,” says Eivind Kolding. “We have a strong competitive position in Ireland and Northern Ireland, and we intend to develop and extract maximum value from this position.”

The Irish economy shows no prospect of material improvement over the next couple of years. The domestic property market remains weak, and the decline in property prices is expected to continue and result in additional impairment charges against the Irish loan book. From 1 April 2012 to end-2014, the Danske Bank Group expects to recognise impairments in Ireland of DKK 5-7 billion. In 2015, impairments are expected to have reached a normalised level.

The potential impairments are based on various assumptions, including an average from-peak-to-trough decline in commercial property values of 70%. For buy-to-let property values, the assumed decline is 70% and for values of owner occupied housing 60%. 

Senior management
Tonny Thierry Andersen, currently CEO of Danske Bank Denmark, will head the new Personal Banking business unit. Personal Banking will serve the Group’s personal customers, including private banking customers.

Thomas F. Borgen, currently head of Danske Bank’s international banking activities, CIB and Danske Markets, will head the new Corporates & Institutions unit. The unit is a merger of Danske Markets, International Banking and the CIB unit, which serves the Group’s large corporate customers.

Lars Mørch, currently CEO of Danske Bank Sweden, will join the Executive Board and head the new Business Banking unit. Business Banking will serve the Group’s business customers and encompass the Baltic banking activities.

The Executive Board of Danske Bank will have the following members from 1 June 2012:

Eivind Kolding, Chairman
Tonny Thierry Andersen, head of Personal Banking
Thomas F. Borgen, head of Corporates & Institutions
Lars Mørch, head of Business Banking
Henrik Ramlau-Hansen, Chief Financial Officer
Georg Schubiger, Chief Operating Officer (until 31 July 2012 at the latest)
Per Skovhus, head of Group Credit (until 1 July 2012)

Attachment: Organisational chart (PDF 147 KB).

Danske Bank A/S

Eivind Kolding, Chairman of the Executive Board, tel. +45 45 14 60 01
Kenni Leth, Group Press Officer, tel. +45 45 14 56 83 / +45 51 71 43 68

This is a translation of a company announcement in the Danish language. In case of discrepancies, the Danish version prevails.