Yahoo Finance Boss of Denmark's biggest bank quits over money laundering scandal
The boss of Denmark’s biggest bank has resigned after the lender became engulfed in a major European money laundering scandal.
Danske Bank chief Thomas Borgen stepped down hours before the firm published a report cataloguing numerous failings to prevent alleged dirty money flowing through its branch in Estonia.
The bank reviewed around €200bn (£178bn) of potentially suspect payments flowing through its Estonian business by non-residents between 2007 and 2015.
Of 15,000 accounts reviewed, Danske found roughly 6,200 had the “most risk factors” and it expected a “significant proportion” of these payments to be “suspicious”. It has reported them to the authorities.
The report uncovered a “series of major deficiencies”, including failing to properly investigate past warnings about the Estonia branch and poor compliance systems.
Danske is facing ongoing criminal investigations regarding the allegations in both Denmark and Estonia, while US authorities are also reportedly looking into the case.
"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,” Mr 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.”
Danske’s shares were down almost 7pc in Copenhagen today following the news. Concerns about the scandal have wiped more than a third off its market value since the start of the year.
The scandal has rocked Denmark with politicians pledging earlier this week to tighten the country’s anti-money laundering laws.
Mr Borgen, 54, stepped up to helm Danske in 2013 after spending most of his career at the Danish lender.
Danske agreed to donate total profits from its Estonian operations over the nine-year period - estimated to be about DKr1.5bn (£180m) - to an independent organisation for fighting financial crime.
As a result of the move the bank cut its profit forecasts for the full year.
