Danske Bank Boss: Too Early To Assess Damage Of Money Laundering Scandal

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The interim chief executive of Danske Bank said that it was still too early to assess the damage that the largest lender of Denmark had sustained from the money laundering scandal that was estimated to be worth approximately 200 billion euro (178 billion pounds). It also warned of potentially “big” fines.

Jesper Nielsen said that the potential that the fines that would result from the investigation over the payments through the Estonian branch of the Danske between the period of 2007 and 2015, many of which the bank said last September were suspicious, could be “big”. He refused to elaborate on the matter. He added that no subpoenas have been issued so far.

On Thursday, the third quarter earnings of Danske revealed that the lending of the bank had increased across the Nordic countries, with solid activity among the retail and commercial customers. It gave its battered shares a welcome respite.

In a telephone interview with Reuters after the results, Nielsen stated: “We should be careful not to underestimate the undercurrent. Because if we look at the bank’s reputation, we can see that it is under pressure.”

After Danske reported a 42 percent decline in its third-quarter pretax profit, Nielsen said that it was therefore too early to assume whether the scandal could result in a significant drop in business volume. He said that it was largely the result of a previously announced donation that it is making to initiatives to in a fight against financial crimes.

As the shares of Danske increased by as much as 6.5 percent, Per Hansen, an investment economist, said in a note: “One could have feared that a larger decline in the number of customers and a diminishing use of bank services could have had a greater negative impact.”

Some investors have been concerned over the possible fines resulting from the money laundering scandal. It is the subject of criminal investigations in Estonia, Denmark, and the United States of America.

Before the increase on Thursday, the share price of Danske had almost halved since February.