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BANK

Danske Bank profits plunge on writedowns

Despite a ten percent revenue growth, "expected weaker long-term macroeconomic developments" made 2014 a tough year for Danske Bank.

Denmark's largest bank, Danske Bank, on Tuesday reported a 46 percent drop in annual profits as it wrote down the value of some operations due to macroeconomic factors.
 
"The macroeconomic environment did not offer much support as the year saw a continuation of low interest rate levels and slow growth," chief executive Thomas Borgen and chairman Ole Andersen said in a joint statement.
 
"Despite this, we managed to increase the topline [gross sales] across our business as a result of a firm focus on delivering value to customers," they added.
 
Net profit was in line with analysts' expectations, falling 46 percent to 3.58 billion kroner (481 million euros, $545 million) as revenue grew ten percent to 43.87 billion kroner.
 
The company in December announced that it would write down the goodwill valuation of its operations in Finland, Northern Ireland and Estonia.
 
Excluding an estimated 9.1 billion kroner for goodwill impairment blamed on "expected weaker long-term macroeconomic developments", profits rose 82 percent to 12.9 billion kroner.
 
The goodwill valuation represents the difference between a company's assets and what a potential buyer would be willing to pay for it.
 
In 2015, the group expects net profit to exceed 14 billion kroner.
 
Net interest income rose five percent "despite persistently low interest rates", while loan impairment charges fell 32 percent, the bank said.
 
Danske Bank has been cutting costs since Denmark became the worst-hit Scandinavian country in the 2008 financial crisis, and the group has struggled to keep pace with rival Nordic banking group Nordea.
 
The Copenhagen-based bank said it had decided to scrap its personal banking operations in the Baltics since the business did not have "sufficient scale to generate an acceptable return".

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DANSKE BANK

Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal

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