Danske Bank shares are lower Wednesday, following news the bank’s CEO has resigned amid the Estonian money laundering scandal.
The move comes after a report on the investigation into money laundering has been issued, finding fault with the investment bank’s processes, which allowed some €200 billion of questionable funds flow though the bank’s Estonian brand, between 2007-15.
By around 1110 BST, Danske Bank shares were 7.32% in the red at DKK162.05. The stock has been mainly lower in recent weeks.
Danske Bank CEO resigns
Thomas Borgen, Wednesday told the Danske Bank board of directors of his intention to resign from his role. His resignation has been accepted by the board and he will continue to lead the bank until a suitable replacement has been found.
“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this,” Borgen said
“Even though the investigation conducted by the external law firm concludes that I have lived up to my legal obligations, I believe that it is best for all parties that I resign. As the CEO, I have the management responsibility for the things that take place in the bank, and, of course, I take on this responsibility” Borgen said.
He added that it was clear to him that resigning was “the right thing to do” but he chose to wait until the investigation had concluded and the findings were presented.
The report found a number of failings at the bank, which allowed the suspicious transactions to move through Danske Bank’s system. They include:
- Major deficiencies in the bank’s governance and control system.
- A large volume of non-resident customers making transactions that shouldn’t have been approved.
- Minimal reporting of suspicious transactions.
- Insufficient focus in the Estonian brand on identifying risk.
- Numerous breaches at a management level.
“The Bank has clearly failed to live up to its responsibility in this matter,” said Chairman of the board, Ole Andersen.
“This is disappointing and unacceptable and we offer our apologies to all of our stakeholders – not least our customers, investors, employees and society in general. We acknowledge that we have a task ahead of us in regaining their trust,” he added.