Goodbye Northern Bank and hello Danske

WHAT’S IN a name? If Danske Bank is to be believed, nothing that cannot be replaced, painted over and rebranded after more than 203 years.

Northern Bank may be one of the North’s oldest financial institutions, but after more than two centuries in business, its name is about to disappear in Northern Ireland. Why?

Simply because its parent group, Danske Bank, has decided to create a new organisation “structured around three business units that will operate across its geographical markets”.

Corporate-speak aside, what this means is that Danske intends to make its presence felt more strongly by rebranding Northern Bank’s 72 branches and other operations in the North.

The familiar logo will be replaced and the Danske brand will become a new landmark in local towns and cities.

It is not just Northern Ireland, of course, that is affected by Danske’s group-wide shake up. It may be the largest bank in Denmark, but it also has banking operations across Finland, Sweden, Norway, the Baltics and the Republic.

This means its subsidiary south of the Border, National Irish, will also be rebranded.

As part of the restructuring, the personal banking and business banking divisions of National Irish will merge with Northern Bank to create a new all-Ireland banking operation.

Eivind Kolding, chairman of Danske’s executive board, says the move reflects the bank’s ambition to “become a truly customer-focused bank in all markets under one name: Danske Bank”.

But in a tiny pool of financial institutions, Northern – or Danske as it clearly wants to to be known – is a huge player and the rebrand will have more than just a subtle impact.

Some customers with a certain sentimental attachment to the Northern Bank name – it is a link with where they live and the history that it represents – may find it a little unsettling. After all, Northern Bank, which has been owned by Danske since 2005, has been around for a long time. It first opened its doors in 1809 as a Belfast-based banking company known as the Northern Banking Partnership. It is likely to take people a little time to get used to handing over Danske-branded banknotes for their purchases instead of the familiar Northern Bank notes that feature the pictures of local inventors. But new notes aside, what will it really mean for Northern Ireland?

Gerry Mallon, Northern Bank’s chief executive and soon to be head of Danske Bank in Ireland, says the move shows its commitment to the North – the fact it is willing to put its name where the money is, so to speak.

Mallon, as you might expect, says the project makes perfect sense. He says he does not expect customers will be overly concerned about the name change.

Mallon is also undettered by the fact he is going to have to appeal to customers in two very different market places – North and South.

“Customers are more alike than different, which is part of the philosophy of the entire Danske Bank Group. As one of Danske’s directors said to me last week, we all drive the same cars, we even watch the same television programmes regardless of where we live. I believe our customers throughout the island want the same thing – a bank that is customer-focused,” Mallon says.

He says Danske has certain strengths that will work to its advantage to create a new unified all-island banking force. But he also admits the new, larger operation will also have to play to “different market politics”.

Northern Ireland’s economic prospects are hardly anything to celebrate, with Mallon himself warning “2012 will be a tough year, with continued low economic growth, low interest rates and a sluggish property market leading”.

But at least it is not in the throes of a Celtic Tiger hangover.

If anything illustrates Danske’s understanding of what it is now up against in Ireland, it is the decision to transfer the commercial and investment property loans portfolio “to a new separate unit of the group”.

Northern Bank, meanwhile, will continue to manage its own woes relating to the property market – in the shape of loan impairment charges totalling £72.5 million in the first quarter of 2012.

Mallon appears to relish what he describes as the “new challenges” that lie ahead of him when it comes to marrying the Northern Bank with National Irish. “It is a new brand and a new name but what it says is that Danske intends to be here for a long time, that a major international group, one of Europe’s strongest financial institutions, is committed,” he says.

And could there also be a potential business boost from the rebranding exercise for some local firms in the North?

At the very least Danske is going to have someone to make new signs for Northern Bank 72 branches. For the moment, though, Northern says it is going to be business as usual under the old familiar logo.

“We are at the very beginning of what will be a major rebranding exercise and, as such, do not yet have all the answers in terms of what contracts will be available or which suppliers we will use.

“Currently we do use some local suppliers and we are likely to continue to do so.”