Danske Bank UK launches into UK lending and boosts profits

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Danske Bank UK has expanded its operations outside Northern Ireland with “small pockets” of loans in Britain.

The Danish bank said it operated in the social housing sector in England, as well as in the syndicated lending space and had lent around £300million in both cases in 2021.

It also sold its carbon-neutral mortgage through brokers in the south of England and said it would look to further increase the supply of mortgages through brokers in 2022.

The bank announced the move in its annual income statement last year, where it recorded pre-tax profits of £61.3m, almost five times the £13.1m it she had posted in 2020.

That attributed the rise in earnings to an improving economic environment, which meant that loan impairment provisions – money set aside to protect against possible bad debts – were cut sharply.

“I am delighted to share a set of results which reflect an improving economic outlook,” said Vicky Davies, CEO of Danske Bank UK. “2021 has been a challenging year characterized by the impacts of the pandemic and the uncertainty stemming from the end of the Brexit transition period.

She said last year’s buoyant real estate market saw lending in this sector increase at the same time as the bank raised its maximum loan-to-value ratio to 95%, as well as the maximum mortgage term to 35 years. against 30 years.

Small business lending has also risen around 9% year-on-year and is close to pre-pandemic levels, although Ms Davies said large business lending remains relatively subdued due to “many organizations with excess cash and some delays in their growth plans.”

She was confident that strong economic growth would remain in place over the coming year, but warned of headwinds from coronavirus variants, political instability, inflation, supply chain disruptions. supply and labor shortages.

“We have seen a massive increase in deposits across our customer base which are now at record highs – up £3bn from those seen at the start of 2020,” Ms Davies said. “As for the pace of economic recovery, a lot will depend on pent-up economic capacity like this turning into consumer spending and business investment. This will require increased levels of confidence from both consumers and businesses.

“We are in the midst of changes to the local competitive landscape and the economy adjusting to what will be a new post-pandemic and post-Brexit business environment. Despite the challenges, with change comes opportunity, and we believe this transition will create opportunities for Danske Bank in both Northern Ireland and Great Britain.

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