Abu Dhabi, UAEMonday 20 May 2019

Scandal-hit Danske to tighten controls as 2018 profit plunges

Denmark's largest bank has had a fall in retail and corporate customers

Danske Bank will spend around $300m to tighten safeguards against financial crime. Reuters
Danske Bank will spend around $300m to tighten safeguards against financial crime. Reuters

Danske Bank, caught up in one of the world's biggest money laundering scandals, reported a 28 per cent drop in 2018 profit, cut its dividend and promised to spend around $300 million to tighten safeguards against financial crime.

The bank is being investigated in Denmark, Estonia, Britain and the US over €200 billion ($229bn) of suspicious payments through its Estonian branch between 2007 and 2015 and could face hefty fines.

Denmark's largest bank said on Friday it had seen a fall in customer satisfaction both for retail and corporate clients and that it would spend up to 2bn Danish crowns ($307m) to step up anti-money laundering efforts, such as improving IT systems and hiring compliance staff.

Interim chief executive Jesper Nielsen said that "2018 has been a challenging year."

He said that the bank was cooperating with the US authorities about their investigations, which he said were in their early stages. He said the bank expected to spend more than 200m Danish crowns on legal fees this year, around the same level as in 2018.

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He added that the bank was committed to finishing an internal investigation of the money laundering case, of which it laid out preliminary findings in September last year.

Net profit fell to 15bn Danish crowns ($2.30bn) for the full year - a drop of 28 per cent - due to costs relating to the Estonia case and a drop in trading income from uncertainty in financial markets.

The bank said it had a net loss of 11,000 Danish retail clients last year, less than 1 per cent of its total, while it continued to see growth in its corporate business across all Nordic markets.

Danske said it will halt its share buy-back programme this year, because it needs to set money aside to deal with potential fines.

Updated: February 2, 2019 04:52 PM

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