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Thread: Danske Bank Sinks as State Support Is Ruled Out

  1. #1

    Default Danske Bank Sinks as State Support Is Ruled Out

    Since Danske Bank is one of the few foreign banks active in the property and commercial lending business in Ireland this news might have knock-on effects on local business. Danske bought National Irish Bank and Northern Bank in 2005 but operated already for a while in the Republic of Ireland and Northern Ireland prior to the acquisition. Dankse holds a loan book credit exposure in Ireland at around EUR15bn and sits on a EUR6bn personal customer lending portfolio.

    Dankse has one of the worst loan to deposit ratios in the EU, actually in the world at 220%



    Lawmakers in Copenhagen have ruled out any state support for Denmark’s biggest lenders. Now here is a very smart reason for the decision by the administration: "It’s of principle importance to this government to protect taxpayers.” At least they seem to have learned from the Irish experience.
    Last edited by YouKnowWhatIMeanLike; 24th January 2013 at 02:17 AM.

  2. #2
    Politics.ie Member neiphin's Avatar
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    what will "true republican " say ?
    "If we VOTE YES there will be no more austere budgets. Fact " Hammer, mayday 12'

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    Politics.ie Member wombat's Avatar
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    I wonder what the German Banks' exposure is?

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    Politics.ie Member b.a. baracus's Avatar
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    I assume that customer deposits up to the Danish State guarantee will still be repaid by the Danish Government in the case of a collapse?

    Funny that they have only been downgraded to a "Buy" from a "Strong Buy". Not exactly junk status yet.
    I ain't gettin' on no plane

  5. #5

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    Bloody Danes with their society and their lifestyle and things working and legoland and protecting taxpayers.

    Ba$tards!
    Fianna Fail - The Anti Democratic Party & The Anti Constitutional Party. Traitors of Irishmen and Irishwomen.

  6. #6

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    Quote Originally Posted by wombat View Post
    I wonder what the German Banks' exposure is?
    funny you should ask. just looking at the fitch report

    "German Bank Exposure to Irish Risk Much Lower Than BIS Data Suggests

    As Fitch noted in its Special Report German Banks’ Exposure to Greece, BIS numbers for German banks’ country exposures can be misleading, because banks’ exposure is reported on an “immediate” risk basis for German banks, whereas other countries report on an “ultimate” risk basis. For example, when a special purpose vehicle (SPV) is set up in Ireland to acquire receivables from a German corporate, on an immediate risk basis the exposure would be allocated to “Ireland”. On an ultimate risk basis, the location where the final risk lies decides the allocation to a country, in this concrete example “Germany”. The difference is very stark in the case of German banks’ exposures to Ireland, and explains to a large extent the misunderstanding that German banks have an enormous exposure to Irish banks and corporate risk. German banks took advantage of the low corporate tax in Ireland compared to Germany, and set up banking subsidiaries that function as booking stations for international interbank lending, asset‐backed securities (ABS) and loans to European corporates. These banks’ assets incorporate no or very little Irish risk, and are funded by their parent and other German banks. Similarly, German banks finance international leasing and finance companies that are headquartered in Ireland, and also own covered bonds issued by DEPFA ACS Bank. In addition, German banks have set up SPVs in Ireland for ABS transactions backed by assets with few or no links to the Irish economy. As a consequence, Fitch believes that the German banks’ exposures to Irish risks are much lower than the BIS numbers might suggest."


    fitch - European Bank Exposure to GIPs: Second Order Risks More of a Concern Than Direct Holdings of Sovereign Debt or Bank Exposures (June 2011)

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