Danske Bank's chief executive Thomas Borgen resigned on Wednesday after an investigation revealed payments totalling €200 billion through its small Estonian branch, many of which the bank said were suspicious.
Mr Borgen (54), who will stay on until a new CEO is appointed, was in charge of Danske Bank's international operations, including Estonia, between 2009 and 2012.
Danish politicians were critical of Danske Bank for not revealing exactly how much money was allegedly laundered and not saying who was legally responsible for the lapses.
“It is deeply embarrassing that for so many years, there have been transactions that should not have taken place. Much of it is expected to be money laundering, and that is simply not good enough by Danske Bank,” business minister Rasmus Jarlov, who oversees Denmark’s banking sector, told a press conference.
Danske Bank said in its summary of a report covering around 15,000 customers and 9.5 million payments between 2007 and 2015 that Mr Borgen, chairman Ole Andersen and the board “did not breach their legal obligations”.
The Estonian non-resident portfolio's around 10,000 customers were registered in 90 different countries, with Russia, Britain, the British Virgin Islands and Finland the main ones, Danske Bank said, adding that around a third of them became clients of the branch in 2007.
Danske Bank, whose already battered shares fell by nearly 8 per cent at one point, said some 6,200 customers had been examined and it expected “a significant part of the payments to be suspicious”. Shares in
The bank said it had taken action including “warnings, dismissals, loss of bonus payments and reporting to the authorities” against current and former staff, as well as overhauling systems found to have failed.
The report found that Danske Bank failed to take proper action in 2007 when it was criticised by the Estonian regulator and received information from its Danish counterpart that pointed to “criminal activity in its pure form, including money laundering” estimated at “billions of roubles monthly”. And when a whistleblower raised problems at the Estonian branch in early 2014 the allegations were not properly investigated and were not shared with the board, Danske said, adding that measures to get its business there under control had been insufficient. – Reuters
