COPENHAGEN: Danske Bank A/S is still looking for a permanent replacement for Thomas Borgen as chief executive officer, half a year after he was removed from his job amid a US$230 billion money laundering scandal.
Chairman Karsten Dybvad said Danske is “working intensively” on finding someone to run the bank long-term, as he addressed shareholders at an annual general meeting in Copenhagen on Monday.
He also made clear that the bank’s executive board agreed not to have its bonuses paid out for 2018, given the ongoing dirty money case.
Danske’s management and board are trying to restore confidence in the bank as it faces criminal investigations over claims that it became a central causeway in Europe for Russian money launderers to channel their funds into the West until as recently as 2015.
Investors are now bracing for fines potentially in the billions of dollars, as they come to terms with the likely consequences of Danske’s failures.
Previous efforts to replace Borgen failed after Danske’s board tried to propose the bank’s head of wealth management, Jacob Aarup-Andersen, for the CEO role.
The 41-year-old was rejected by the financial regulator for lacking the relevant experience. The bank has been run by Jesper Nielsen since October, who has taken on the CEO role on an interim basis only.
He’s head of Danske’s Danish banking operations.
Danske went through one of its worst years in 2018, leaving employees struggling to take any pride in their work, according to the chairman. Dybvad, who has been running the board since December, described last year as a “low point” in the history of Denmark’s biggest bank.
Dybvad said he’ll do everything in his power to “exploit all available options” to claw back bonuses to a number of senior staff in Estonia and Denmark, as criminal investigations continue.
Denmark’s Shareholders’ Association said it welcomed the stance.
Meanwhile, there are signs that the laundering case hasn’t severely impacted Danske’s business.
According to Claus Wiinblad, head of equities at shareholder ATP, the core operations remain “robust,” even though funding costs have risen amid concerns over potential fines.
According to Bloomberg Intelligence, Danske may be facing total fines between US$2 billion and US$2.5 billion for its money laundering scandal.
That should be manageable for the bank, given it has a common equity Tier 1 buffer – a measure of capital – of more than US$6 billion, Bloomberg Intelligence analysts Philip Richards, Jonathan Tyce and Elliott Stein said on Monday.