Clients return to Danske as it moves past laundering scam

BLOOMBERG 

Customers are coming back to Danske Bank A/S as Denmark’s largest lender is putting past scandals behind it.
Danske’s retail customers are growing for the first time in 10 years in its home country, according to a Voxmeter poll of the Nordic nation’s 20 largest banks, cited by local media, including Finans. The lender attracted a net inflow of 14,061 clients from the beginning of last year through the end of April this year, the media said.
“We have seen a major improvement in customer development throughout 2022, and the positive development has continued this year,” Mark Wraa-Hansen, head of retail customers in Denmark said by email. “There’s been an increased inflow of more complex customers who require more complex advice, for whom we can make a difference with our expertise advise.”
Danske Bank has been working to restore trust among its stakeholders as it recovers from earlier misconduct, including the largest money laundering scandal in Europe. It last year settled a fine with authorities and had earlier replaced most of its top management.
“Our customer satisfaction also continues to improve,” Wraa-Hansen said. “We are fully aware that our historic cases have negatively affected the bank’s reputation.”

Danske Buybacks Still Trapped on Legal Issues
Investors hoping for a return of share buybacks at Danske Bank A/S may have to wait longer as there are legal issues still to be resolved even after a long-running money laundering probe has ended, Barclays says.
Denmark’s largest lender has plenty of excess cash that could be returned to shareholders following the conclusion of criminal and regulatory investigations surrounding its involvement in the scandal late last year, analyst Namita Samtani says in a client note.
However, Danske Bank still has civil claims filed against it by institutional investors with a current total claim amount of 12.8 billion Danish kroner ($1.9 billion), she said. Also, according to the plea agreement related to the money-laundering case, Danske has agreed to review and update its compliance programs as well as periodically report its progress to the US Department of Justice. For example, a report is due no later than one year after the agreement was executed, it said.
“We believe resuming buybacks shortly after a settlement with the DoJ, particularly if the DoJ does not find Danske’s compliance updates satisfactory, could create the wrong perception,” she said.
Barclays estimates that Danske Bank has around 150 basis points of excess capital as of the first quarter and forecasts a 20.1 billion-krone net profit this year, potentially creating further excess capital.
“We believe this is trapped capital which investors should not pay for,” she said.