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Danske Bank closing three branch offices, to reduce number of employees

Flags in front of Danske Bank's Estonian branch in Tallinn.
Flags in front of Danske Bank's Estonian branch in Tallinn. Source: Reuters/Scanpix

Danske Bank's Estonian branch have announced that they are closing their offices in Tartu, Jõhvi and Pärnu by the end of the year. The bank will also reduce the number of its employees in Estonia, though they will do this step by step. The bank's home loan business remains unchanged for now, but that they might sell it is a possibility, Danske said.

Spokesman Tõnu Talinurm told ERR that Danske is planning to close the three regional offices by the end of 2018. Customers could go on doing business with the bank based on the digital signature and online services. The bank's Tallinn headquarters remain open, Talinurm said.

Danske might also sell loan portfolio

The bank has plenty of customers with home loans, but this line of business shouldn't be affected too much, Talinurm added—in case a bank representative is required eg. to sign a loan agreement, someone would be sent to the office of the notary public handling the matter, he said.

The bank is slowly scaling back its business in the Baltic states, which sooner or later will bring layoffs as well. Just when and how many of Danske's employees can expect to lose their jobs Talinurm didn't want to specify.

The speed at which the bank will retreat depends on how quickly it can reduce its client portfolio. "We'll continue to have local people here in all of the Baltic states," Talinurm said. He added that they are also keeping their service centre in Lithuania, where they employ some 2,200 people.

The bank's loan portfolio, including business, consumer and home loans, will continue without changes to any of its conditions for now. The possibility that the bank might sell its loan business can't be excluded, Talinurm stressed.

As of July this year, Danske holds some 8% of all of Estonia's home loans. As the Financial Supervision Authority confirmed to ERR, the bank will have to announce any impending sale of its loan business to its customers.

Accounts of customers without loans or investment deals already closed

Several papers wrote earlier this week that the bank is in the process of blocking its customers' cards. This isn't quite the case, according to Talinurm: the bank merely closed the accounts of all those customers that don't have loans or investment agreements with Danske.

All those whose accounts were closed were informed of the step well in advance. More than half of the bank's business clients are affected by the decision to close the daily banking business, Talinurm said.

The bank will concentrate on its business from Nordic as well as international business clients in the three Baltic states. Because of this change of strategy, Danske is terminating its agreements with local business clients in Estonia, Latvia and Lithuania step by step.

Editor: Dario Cavegn

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