Posted on Thursday 10 May 2012 by Ulster Business

Northern Bank

Northern Bank is to change its name as part of a re-organisation by its parent company, Denmark-based Danske Bank.

Danske announced that by the end of 2012 it will have rebranded Northern Bank and the Republic’s National Irish Bank as Danske Bank and will run the banks on an all Ireland basis.

Gerry Mallon will continue as Northern Bank Chief Executive and under the new structure from next month the Personal Banking and Business Banking divisions of National Irish Bank will merge with similar business units in Northern Ireland and report to him.

The company said the re-organisation mirrors a similar group wide set-up being introduced in all Danske Bank operations focused on three business units: Personal Banking, Business Banking and Corporates & Institutions.

“With our new organisation, we push decision-making closer to our customers. This shift will make business operations simpler, faster and more agile,” said Chairman of the Executive Board of Danske Bank Eivind Kolding.

“It is not without sadness that we say goodbye to the Northern Bank brand name and replace it with Danske Bank. Northern Bank is a long-established and well-respected brand, but with our new organisational set-up, our overall ambition is to create an even better bank for our customers that is internationally recognised for its strength and expertise.”

Northern Bank chief executive Gerry Mallon told Ulster Business that the new structure had “no negative implications for jobs” and would further strengthen its ability to serve customers.

Mr Mallon also said that while there would undoubtedly be some “emotional attachment” to the Northern Bank name among staff, he was confident customers would have no problem with the Danske rebrand.

“When we survey customers and ask them what’s the most important thing about the bank, they rarely say the name. They want security, they want good service, convenience, value for money, and for us to be helpful. As far as we’re concerned none of those things are going to change. It is the same people delivering the same service. It’s only the name above the door that changes,” he added.

The CEO also said the announcement should be taken as a vote of confidence in the Northern Ireland economy.

“The rebrand is a demonstration of the fact that we’re already part of a major international bank and the security of being part of that is very important to customers. It is also a commitment by Danske Bank that they are going to be here for a very long time,” he said.

Northern Bank also released first quarter results which showed that property-related impairment charges continue to weigh on its performance.

Underlying profit for the three months to March 31 was up 51% to £18m from £11.9m in the same quarter of 2011.

But loan impairment charges – bad debts which it has chosen to write off – increased to £72.5m from £38.9m in the same quarter a year ago, leading to an overall loss of £54.5m - bigger than the £27m loss posted in Q1 2011.

The bank said charges remain elevated because of the ongoing slump in the property market, but added that it had seen a significant improvement in operating income and costs and remained “well placed to comfortably withstand the economic conditions”.

Northern also said it closed six branches in the quarter, which it attributed to changing consumer habits and an increase in online banking.

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