By Frances Schwartzkopff
The CEO of Danske Bank has apologised for management’s failure to prevent criminals from using his firm to launder billions of dollars in illicit funds over many years.
The apology follows an unusually harshly worded public reprimand by the financial regulator.
The Danish government said management’s failings were “unforgivable” and the central bank warned that the reputation of the whole country was at risk. “I’m very sorry on behalf of all stakeholders,” Danske CEO Thomas Borgen said in an interview.
He also said the bank is “in a very different place today” with considerably more focus on preventing money laundering.
Danske is the largest bank in the North courtsesy of its purchase of Northern Bank and National Irish Bank 15 years ago. In the Republic, it is running down its loan books and sold its tracker mortgages to a vulture fund.
The Danish Financial Supervisory Authority said Danske’s management failed on multiple counts to act in compliance with the rules.
The assessment followed reports by the Berlingske newspaper that Danske was used as a laundromat by criminals, including entities with ties to Russian President Vladimir Putin, the Russian security service, FSB, as well as members of the Azeri regime.
The money laundering, alleged to have taken place between 2010 to 2014, was done via Danske’s operations in Estonia, which have since been terminated.
“It’s no doubt that we should have understood the depth and the breadth of the issues in Estonia better, faster than we did,” Mr Borgen said.
The failures led to reputational damage for Danske and for the financial sector.
Bloomberg. Additional reporting Irish Examiner