Danske offers 2,000 staff option to leave bank

Danske Bank is offering 2,000 of its employees in Denmark the option of stepping down as the cost of adapting to a world with stricter regulations and negative interest rates just keeps growing.

Staff have until the end of January to decide, according to an emailed comment sent by the bank.

The news comes as Danske acknowledges its costs are still rising, following a vast Estonian dirty-money scandal. In an interview in Stockholm, the chief executive of Danske in Sweden, Johanna Norberg, said “the peak” level of investment to meet anti-money laundering requirements has “not yet been reached”.

Ms Norberg, 48, has been running Danske’s operations in the biggest Nordic nation since September, after years spent overseeing the bank’s markets units.

A month after Ms Norberg took on the job of Swedish CEO, Danske announced an organisation-wide hiring freeze to help cope with growing compliance costs.

That’s as the EU makes ever greater demands forcing banks to take adequate steps to ensure they don’t touch suspicious transactions.

Danske says it’s now reviewing ‘all costs across the group’.

Since admitting it failed to properly screen €200bn in non-resident flows through Estonia, Danske has become the target of multiple criminal investigations. Investors are now bracing for hefty fines. Ms Norberg says there’s plenty of capital to deal with any challenge.

The bank can “manage whatever might happen”, she said.

We are one of the best capitalised banks in Northern Europe.” Danske is being investigated in Denmark, Estonia, and France, as well as by the US Department of Justice and the US Securities and Exchange Commission. It also faces a number of lawsuits.

The bank’s market value has plunged by almost 40% since late September 2018, when it revealed the scale of its Estonian scandal. The bank’s capital adequacy, however, remains better than most.

Equity analysts at Citigroup recently advised clients to brace for a fine of about $3.2bn (€2.8bn).

“I don’t feel worried,” Ms Norberg said.

Danske is just one of a number of Nordic banks being investigated for potential money laundering. In Sweden, Swedbank and SEB — which dominate in the Baltic region — have also been tainted by scandals.

Earlier this month, analysts at JPMorgan Cazenove warned clients of the risk of “significant cost pressure given ongoing scrutiny of systems and controls”.

Bloomberg