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Danish banks passed European stress test

Denmark's four largest banks passed the European Central Bank's assessment but all four will face large write-downs.

Published: 27 October 2014 08:08 CET

Danish banks passed European stress test

Twenty-five European banks failed a 'stress test' by the Frankfurt-based European Central Bank. Photo: Daniel Roland/Scanpix

Four large Danish banks passed the European Central Bank’s (ECB) stress test while 25 other banks across Europe failed.

Nearly one in five of the of the 130 banks examined by the ECB failed the examination, but Denmark’s four largest banks – Danske Bank, Nykredit, Jyske Bank and Sydbank – all received passing marks by the Danish Financial Services Authority (Finanstilsynet), which carried out a stress test in conjunction with the ECB.

The Danish banks were forced to write down large sums in capital following the exam, led by a 700 million kroner ($119 million) write-down by Danske Bank, the nation’s largest.

Jyske Bank was told to write down 456 million kroner, Nykredit 501 million kroner and Sydbank 75 million kroner.

A total of 25 eurozone banks, including nine in Italy, failed the ECB’s stress tests. The examination of the banks was carried out by the ECB in advance of the Frankfurt-based institution taking on a new watchdog role on November 4th. The assessment was meant to evaluate whether Europe’s largest banks would be able to survive another financial crisis.

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Deutsche Bank to pay $130m to settle US bribery probes

A woman walks past the offices of Deutsche Bank in London. Photo: Tolga Akmen / AFP

The bribery case relates to illegal payments and to false reporting of those sums on the bank's books and records between 2009 and 2016, the Department of Justice said in a press release.

The bank “knowingly and wilfully” kept false records after employees conspired with a Saudi consultant to facilitate bribe payments of over $1 million to a decision maker, the DOJ said.

In another case, the bank paid more than $3 million “without invoices” to an Abu Dhabi consultant “who lacked qualifications… other than his family relationship with the client decision maker,” the DOJ said.

In addition to criminal fines and payments of ill-gotten gains, Deutsche Bank agreed to cooperate with government investigators under a three-year deferred prosecution agreement.

In the commodities fraud case, Deutsche Bank metals traders in New York, Singapore and London between 2008 and 2013 placed fake trade orders to profit by deceiving other market participants, the DOJ said.

The agreement took into account Deutsche Bank's cooperation with the probes, DOJ said.

“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” said Acting US Attorney Seth D. DuCharme of the Eastern District of New York.

“This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”

“We take responsibility for these past actions, which took place between 2008 and 2017,” said Deutsche Bank spokesperson Dan Hunter, adding that the company has taken “significant remedial actions” including hiring staff and upgrading technology to address the shortcomings.

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