Scandal-plagued Danske Bank profits fall, sending shares plunging

Shares in Denmark's Danske Bank, caught up in a gigantic money laundering scandal, dived on Tuesday after it reported a sharp fall in first-quarter net profits and revised annual targets downwards.

Scandal-plagued Danske Bank profits fall, sending shares plunging
File photo: Ints Kalnins / Reuters / Ritzau Scanpix

The biggest Nordic bank is embroiled in criminal investigations in several countries over some 200 billion euros in transfers that passed through its Estonian branch between 2007 and 2015, involving some 15,000 foreign clients, many Russian.

Net profits over the first three months of the year came in at 2.8 billion kroner (375 million euros), a 36 percent drop from the same period in 2018, the bank said in a statement.

The Danish lender also revised its annual targets downwards, saying 2019 net income was now expected to be lower than the previous year.

Its share price plunged nearly seven percent to 121.60 kroner at 10am on the Copenhagen stock exchange, which was slightly up.

The bank lost 8,500 customers in Denmark during the first three months, after losing 9,900 in the previous quarter, despite its efforts to move past the money laundering case.

The bank said in a statement that expenses rose by nine percent in the first quarter “due primarily to investments in regulatory requirements and compliance and further anti-money laundering efforts as well as investments in our ambitions within digital transformation”.

The bank has been reeling as investigations into the suspicious transactions at its Estonian branch have been launched in Denmark, the United States, France, Britain and Belgium.

Danske Bank said in February it was closing operations in Latvia, Lithuania and Russia.

READ ALSO: More on the Danske Bank money laundering scandal

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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