Cogenhagen — Danske Bank, caught up in one of the world's biggest money laundering scandals, reported a 28% drop in 2018 profit, cut its dividend and promised to spend about $300m to tighten safeguards against financial crime.
The bank is being investigated in Denmark, Estonia, Britain and the US regarding €200bn worth of suspicious payments through its Estonian branch between 2007 and 2015 and could face hefty fines.
Denmark's largest bank said on Friday it had seen a fall in customer satisfaction both for retail and corporate clients and that it would spend up to two-billion Danish krone ($307m) to step up anti-money-laundering efforts, such as improving IT systems and hiring compliance staff.
Interim CEO Jesper Nielsen said that “2018 has been a challenging year”.
He said the bank was co-operating with the US authorities about their investigations, which he said were in their early stages. He said the bank expected to spend more than 200-million Danish krone on legal fees in 2019, about the same amount as in 2018.
He added that the bank was committed to finishing an internal investigation of the money laundering case, of which it laid out preliminary findings in September last year.
Net profit fell to 15-billion Danish krone ($2.30bn) from 20.9-billion for the full year — a drop of 28% — due to costs relating to the Estonia case and a drop in trading income from uncertainty in financial markets.
The bank said it had a net loss of 11,000 Danish retail clients in 2018, less than 1% of its total, while it continued to see growth in its corporate business across all Nordic markets.
Danske said it would halt its share buy-back programme in 2019 because it needed to set money aside to deal with potential fines. The bank proposed a 2018 dividend of 8.5 Danish krone per share, lower than the 8.64 krone expected by analysts in a Reuters poll.
Danske also said it expected a net profit in the range of 14-billion to 16-billion krone in 2019, from the 15-billion in 2018, in line with the 15.04-billion expected by analysts for 2019.
In December, the bank downgraded its forecast for 2018 net profit for the second time to around 15-billion krone from an earlier forecast of 16-billion to 17-billion, to reflect weak markets in the fourth quarter.
The bank had already cut the forecast from 18-billion to 20-billion krone in September.
Reuters
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