Danske Bank decides against offloading Danica Pension
DENMARK – Danske Bank has decided against selling subsidiary Danica Pension as it adjusts to the "new normal" financial environment and seeks to increase the parent group's capital ratio.
Announcing its third-quarter results today, the group said a new business strategy would aim to improve financial results, confirmed the sale of its "non-core Ireland portfolio" and stressed the importance of Danica to the company as a whole.
Danica Pension is one of the country's largest non-statutory pension institutions, with assets of DKK317bn (€42.6bn) at the end of June – second only to PFA Pension.
The banking group mooted its sale earlier in the year, when chief executive Eivind Kolding said it was a possibility despite the "clear synergies" between the parent company and the insurance subsidiary.
Outlining its 'New Standards' strategy that will see Danica retained as part of the group, it said: "The group confirms its role as a universal bank in the regions in which we operate today, along with value-adding business within asset management (Danske Capital) and life insurance and pensions (Danica)."
The closure of Danica Pension's Irish subsidiary Danica Life was announced earlier in the year, with existing policies transferred to the Danish parent at the end of the current month.
It will maintain its Swedish and Norwegian operations.
The company's statement once again stressed the "synergies" to be gained by Danske keeping Danica, saying it formed a "natural part" of the group's product portfolio.
"In addition, we have satisfied ourselves that continued ownership of Danica will maximise value for the group," it said. "Danica will therefore remain a core part of the group, and we will pursue additional synergies."
Danske said it would also issue DKK7bn of new shares – "as market conditions allow" – in an effort to boost the group's credit rating.