Danske Bank Fires Danish Banking Chief After Customers Overcharged
24 June 2019 - 5:32PM
Dow Jones News
By Dominic Chopping
Danske Bank AS (DANSKE.KO) on Monday dismissed executive board
member and Head of Danish Banking Jesper Nielsen for his part in
the mismanagement of a financial product that overcharged its
customers.
Fees for Danske Bank's Flexinvest Fri product were raised in
July 2017. In a statement Monday the bank said that interest rates
at that time were low and expected returns were similarly low.
"In this perspective, the management decisions caused the fees
to be set at too high a level in relation to the expected returns,
Danske said. This meant that fees were too high for all customers,
and it made the product unsuitable for some customers.
Fees weren't lowered again until November 2018.
The matter affects about 87,000 customers in Denmark, and Danske
expects to pay out a total of around 400 million Danish kroner ($61
million) in compensation.
Danske is currently being investigated by Estonia, Denmark,
France and the U.S. about allegations that around $230 billion in
suspicious funds from Russia and other former Soviet states entered
Europe through its tiny branch in Estonia.
As a result, then-CEO Thomas Borgen resigned amid the scandal
and Mr. Nielsen filled in as interim CEO until a few weeks ago when
former ABN AMRO Bank NV executive Chris Vogelzang took over.
"Jesper Nielsen has made significant contributions to the bank
throughout many years, most recently as Interim CEO, for which we
thank him," said Chairman Karsten Dybvad.
"But, in the specific matter, he was at the time one of the
responsible executive board members who did not to a sufficient
degree ensure that the Flexinvest Fri product was suitable for the
bank's customers. Therefore, we find that Jesper cannot continue in
his position."
Until a replacement has been found, Glenn Soderholm, head of
banking activities in Norway, Sweden and Finland, will also take
responsibility for banking activities in Denmark.
The Danish Financial Supervisory Authority has been informed and
is currently looking into the matter. "In this connection, we
expect to receive justified and severe criticism from the FSA,"
Danske concluded.
Write to Dominic Chopping at dominic.chopping@wsj.com;
@domchopping @WSJNordics
(END) Dow Jones Newswires
June 24, 2019 03:17 ET (07:17 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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