Danske, Denmark's biggest financial group, will join a two-year deposit guarantee scheme announced by the Danish government last night.
Danske, which owns National Irish Bank in the Republic and Northern Bank in Northern Ireland, had applied to take part in the Irish Government's bank guarantee announced last week.
In an interview with Reuters news agency, the bank's chief financial officer Tonny Thierry Andersen said Danske's Irish operations were affected by the financial crisis.
Danske said it expects to be liable for around a third of the €6.6bn fund participating Danish banks are expected to contribute.
Danske expects the guarantee to reduce its net fee income by about €0.3bn per year for two years, and that its third-quarter earnings will be slightly weaker than anticipated due to the imapct of the financial crisis.
Mr Andersen said: 'What we can see in Ireland is that asset values continue to fall and we are paying the consequences of that.'
This morning Danske's shares were down 10% at 119.75 Crowns, while the Copenhagen exchange's top 20 index was down 5%.
