As we have previously discussed, the Irish banking sector has in the last few years become an area lacking in competition and finance options for many business owners, particularly in the area of small and medium enterprise (SME) financing and an area rife with controversy in particular pertaining to mortgage issues. Recent years have seen many shifts in the sector. Arguably the most obvious clue in recent years that the Irish banking sector was entering a period of flux was Danske Bank beginning to withdraw from the banking sector in Ireland. Danske Bank first came to the attention of the Irish general public when the National Irish Bank became a part of Danske Bank. Just a few short years after this announcement, Danske Bank began its withdrawal from the Irish retail banking sector. Reports this week state that the bank is now embarking on the final phase of this lengthy withdrawal process.
Danske Bank has reportedly hired accountancy firm KPMG to find buyers for its €2billion residential mortgage book. This undertaking will be one of the largest sales of residential mortgages we have seen so far, with a portfolio that includes both owner-occupier and buy-to-let mortgages. This is expected to generate a great deal of interest from mainstream lenders.
Further to the selling of the mortgage book, Danske Bank is also due to sell all remaining parts of their business in Ireland in a call which will see debts such as overdrafts, credit card bills, overdrafts and other loans being offered. This news has sparked fears of so-called vulture funds we have spoken of previously, swooping in to buy these loans. There also concerns that some of the non-mainstream lenders such as debt collection agencies etc. will seek to buy these loans, which are said to be ready to be sold at a tiny percentage of their face value.
In a somewhat odd addition, the bank will also be auctioning its corporate collection of antique silver, which is unlikely to have any effect on mortgage-based homeowners or business owners but remains an important part of Irish history to be passed on and very clearly signifies that despite remaining one of Scandinavia’s top banking institutions, Danske Bank will soon exist as just a memory in the mind of the Irish public.
If you have any concerns regarding your own finances or that of your business in the midst of these uncertain times of upheaval, please don’t hesitate to contact us here at DCA Accountants, where we will be happy to assist and advise in any way possible.
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