Danske Bank profits rise, analysts speculate on N.Ireland sale

* Danske Bank (Copenhagen: DANSKE.CO - news) raises profit outlook after strong Q2

* Analysts see Danske preparing N. Ireland (Other OTC: IRLD - news) arm for sale

* Shares (Frankfurt: DI6.F - news) up more than 4 percent (Releads, adds detail on Northern Irish business, share price, analyst comment)

By Ole Mikkelsen

COPENHAGEN, July 22 (Reuters) - Danske Bank raised its full-year profit forecast on Wednesday after its earnings beat expectations and said it would run its Northern Ireland arm as a standalone business, fuelling speculation of a sale.

Danske's shares rose more than four percent to their highest since July 2007 and were one of the biggest gainers in the FTSEurofirst 300 index.

Denmark's largest bank by market value has had to cut costs to cope with slow growth rates in its main market Denmark after a property bubble burst and has sought market share in countries such as Norway and Sweden.

It now plans to run its Northern Irish business, which operates under the Danske Bank brand, as a standalone business. It has a market share of 20 percent in personal banking in Northern Ireland and 28 percent in business banking.

"We have made a business review that concluded that synergies between the Northern Irish market and the Nordic markets are limited," the bank said in its results statement, adding that the changes aimed to improve profitability.

"They are making the bank in Northern Ireland ready to be sold and it make good sense," analyst Christian Hede from Nordea Markets said.

A Danske Bank spokesman said in response to the speculation: "We are happy with our activities in Northern Ireland and have no plans to sell."

The bank boosted second-quarter profit by 13 percent, helped by a fall in loan losses, paving the way for an increase in its 2015 net profit outlook to more than 16 billion Danish crowns ($2.35 billion) from previous guidance of more than 14 billion.

"There is still room for another upgrade of the guidance in the second half of the year if the good trend seen in the first half of the year continues," Bjorn Schwarz, an analyst at Sydbank (Copenhagen: SYDB.CO - news) , said.

The group's pretax profit rose 13 percent to 5.81 billion Danish crowns ($851.5 million) for the three months to June 30, beating a forecast of 4.86 billion. Its loan book increased in Norway and Sweden, while it fell in Denmark versus the first quarter.

Also, for the first time since 2007, the bank recorded a negative loan impairment charge of some 219 million crowns against impairment of 626 million crowns a year earlier.

Chief Executive Thomas Borgen told Reuters: "The second quarter is a good continuation of the last couple of quarters."

"We can see high customer activity and we have seen continued improved macro economic conditions and therefore also lower loan impairments."

Danske's shares are up 45 percent since Borgen took office in September 2013 while the pan-European banking index has risen 20 percent.

($1 = 6.8235 Danish crowns) (Additional reporting by Teis Jensen; editing by Sabina Zawadzki and Jane Merriman)