Denmark’s Danske Bank more than doubled its exposure to Irish bonds in the first three months of this year, according to quarterly results published yesterday.

The results show that Danske increased its holding in Irish bonds to €5.7 billion at the end of March from €2.7 billion at the end of December.

It held €5.4 billion in government bonds at the end of the first quarter, up from €2.6 billion at the close of last year. It also has €62 million in corporate bonds and €141 million in “other covered bonds”.

At the end of March, the Danish bank did not hold any government bonds in either Greece or Cyprus and while it did increase its exposure in Portugal and Spain, the percentage rise was lower than for Ireland.

Danske’s Irish subsidiary made a loss of €8.8 million in the first three months of 2013. This compared with a loss of €15 million in the previous quarter, reflecting reduced impairment charges.

Income increased to €14.6 million. The bank’s total loan book stood at €3.2 billion at the end of the first quarter, while its customer deposits rose by 12 per cent to €3.4 billion.

Although underlying expenses in Ireland were 5 per cent lower, Danske saw overall costs rise to €17.9 million as the impact of the reorganisation of its retail business announced last year was felt.

Loan impairments amounted to €5.5 million in the three months to the end of March, compared with €15.7 million in the previous quarter.

Its Danish parent said total impairments in Ireland for 2013 and 2014 are expected to be around 2.5 billion Danish kroner (€335 million).

Country manager Terry Browne said the performance was in line with expectations. "While costs remain elevated, the underlying costs trend is moving in the right direction as is the case with impairments, which continue their downward trajectory as previously guided," he said.

Danske previously operated in the Republic as National Irish Bank before closing its retail branches. Its main focus is on corporate and institutional, and private banking clients.