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Danske Bank loses 11,000 retail customers after money laundering scandal


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Danske Bank loses 11,000 retail customers after money laundering scandal

Danske Bank A/S lost 11,000 Danish retail customers in a challenging year due to the money laundering scandal, but its corporate deposit base held steady, interim CEO Jesper Nielsen told analysts during an earnings call Feb. 1.

He was speaking after the Danish lender reported 2018 full-year profit of 13.91 billion Danish kroner, down from 20.11 billion in 2017, primarily due to increased expenses connected with the money laundering case.

"While we are always said to lose a customer, the outflow has not been large enough to impact materially on the business," he said.

"We are doing all that we can to stop the outflow," Nielsen said, noting that the departing customers account for about 0.8% of the bank's core Danish retail client base.

Rebuilding trust

Danske Bank handled as much as €200 billion in illicit money via its Estonian branch between 2007 and 2015, mainly through nonresident accounts in Russia, Estonia and Latvia. It is now under investigation by regulators in Denmark and Estonia, as well as the U.S. Department of Justice.

The bank held 150 meetings with commercial, retail, corporate and institutional customers 2018 in a bid to rebuild trust, Nielsen said.

Nielsen said Danske Bank is working "tirelessly" on its internal investigation into why its anti-money laundering controls at its Estonian branch failed, but is not sharing any further updates on the process for the time being.

It as too early to make guesses about the quantum of fines it would have to pay as a punishment for its AML failures, he said.

"If we could choose to pay all of the different fines in one go, that would be nice. But we have to accept that we are not the ones calling the shots," Nielsen said.

Danske Bank could be hit with fines of up to $9 billion over the money laundering scandal. The Danish regulator alone may fine Danske Bank 4 billion kroner, while the U.S. DoJ could levy a multibillion dollar fine.

As of Jan. 31, US$1 was equivalent to 6.52 Danish kroner.