Scandal-hit Danske Bank vows tighter controls as profit tumbles

Denmark's Danske Bank, caught up in a massive money laundering scandal, said Friday its 2018 earnings plunged nearly 30 percent and promised tighter controls to prevent any further regulatory lapses.

Scandal-hit Danske Bank vows tighter controls as profit tumbles
Danske Bank's interim CEO Jesper Nielsen presents the lender's annual results in Copenhagen. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Net profit came in at 15 billion kroner (2 billion euros) for the year, down 28 percent on 2017, but largely in line with analyst forecasts and enough to reassure investors Danske Bank's core business was sound.

The shares were up nearly two percent in mid-morning trade in Copenhagen while the broader market was showing a gain of 1.4 percent.

“The results were largely in line with expectations and investors were reassured that the core Danske Bank businesses are going well,” Sydbank analyst Mikkel Emil Jensen told AFP.

Interim CEO Jesper Nielsen said in a statement that “2018 was a challenging year,” with criticism following the money-laundering uncovered at its Estonia unit “justified.”

“We must use the lessons learned from this case to prevent something similar from ever happening again,” Nielsen said.

“That is why in coming years we will further strengthen our efforts within compliance and anti-money laundering activities to become best in class among our peers.”

Some 200 billion euros, the bulk of which appears to have come from uncertain sources, was channelled through Danske's Estonian branch between 2007 and 2015.

These non-resident account transfers are now being investigated by authorities in Denmark, Brussels, Britain and the United States, raising the prospect the bank could face heavy fines.

For 2019, it said it expected a net profit of 14-16 billion kroner.

READ ALSO: Money laundering scandal costs trust amongst Danske Bank customers


Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal