Friday , November 16 2018

Danske Bank forced to renew CEO search after regulator rejects pick

Bloomberg

Danske Bank A/S’s top pick for a new chief executive officer was rejected by the Nordic nation’s financial regulator, adding to turmoil at the lender that is mired in a money laundering scandal.
The Copenhagen-based bank on Wednesday withdrew its application to the Danish Financial Supervisory Authority to name 40-year-old Jacob Aarup-Andersen, the head of its wealth management, as CEO after the agency said a person with more experience is needed.
“The Board is in dialogue with other potential candidates and will now continue the recruitment process in order to find the best possible person for the position,” Chairman Ole Andersen said in a statement.
Denmark’s biggest financial conglomerate is putting together a new executive team to steer it through one of its worst crises in living memory. It faces investigations in five countries for money laundering and has admitted that a large part of about 200 billion euros ($231 billion) that flowed through an Estonian unit between 2007 and 2015 may need to be treated as suspicious.
The bank is seeking a replacement for Thomas Borgen, who was relieved of his duties on Oct. 1 and replaced on an interim basis by insider Jesper Nielsen. The FSA declined to comment and referred to Danske’s statement.
The rejection of Aarup-Andersen increases the likelihood of the bank going outside of Denmark for a new CEO, Per Hansen, an investment economist at Nordnet in Copenhagen, said in a note. In the meantime, Nielsen is a “calm and solid” interim head who can manage the bank in the coming months, Hansen said.
The US Department of Justice is also investigating the laundering case, adding to investor concerns about the size of potential fines. Probes are also under way in Denmark, Estonia, Switzerland and the UK The bank’s regulators and auditors are also being investigated for their role in the scandal.
Shares in Danske have plunged 42 percent this year as news of the dirty money case unnerves investors and angers politicians.

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