Danske Unveils Sweeping Changes to Executive Management Team

(Bloomberg) -- Danske Bank A/S unveiled a set of broad changes to its management team, replacing its head of wealth management and appointing a new finance chief as part of a plan it says will make its business more efficient.

Danske Unveils Sweeping Changes to Executive Management Team

The reorganization was announced just one day after Denmark’s biggest bank, which is based in Copenhagen, said an executive who had overseen operations connected to a money laundering investigation was stepping down.

Chief Executive Officer Thomas Borgen, 54, said Friday’s news was unrelated to the ongoing probes into Danske’s alleged failures to prevent its Estonian unit from being used to launder billions of dollars several years ago. The purpose of the new structure is to create a simpler organization, he said.

“What I am doing now is basically making sure that we get much closer to our clients and amplify the positive development,” Borgen said by phone. “It’s nothing to do” with the investigation into money laundering, he said.

Danske Unveils Sweeping Changes to Executive Management Team

The Changes

Chief Financial Officer Jacob Aarup-Andersen, 40, will become the head of Danske’s $250 billion wealth management operations as the current head, Tonny Thierry Andersen, steps down, the bank said on Friday. The CFO role will be filled by Christian Baltzer, who had been finance chief at insurer Tryg A/S. The changes also include merging Danske’s personal and business banking into country organizations.

Borgen said the bank’s goal is to collaborate more with third parties when appropriate. “We will to a much larger extent invite in external providers toward our customers,” he said. “So bundling much more and opening up the platform to a much larger extent than we have done historically.”

Shares in Danske lost a little less than 1 percent by mid-morning local time. The Bloomberg index of European financial stocks was down about 0.5 percent.

The changes mean that retail and business banking will be split into a Danish unit, to be run by Jesper Nielsen, and a unit that covers the rest of the Nordic countries, to be run by the current head of corporates and institutions, Glenn Soderholm. C&I will remain a global organization, to be overseen by Jakob Groot.

Danske is also creating a unit that it says will be devoted to the bank’s development across departments including marketing, partnerships, strategy and products.

Laundering Probes

Danske Chairman Ole Andersen said on Thursday that investigations into what went wrong at the bank are continuing, and no corner of the organization will be free from scrutiny. Andersen also said he has confidence in the CEO, Borgen, and the rest of the management team. But he said Danske made a mistake in not tackling the issues at its Estonian unit sooner.

“We should have initiated deeper investigations at an earlier point in time,” he said. “Although Lars (Morch) took a number of initiatives to correct the way things were, in hindsight, we can see that this wasn’t enough.”

Danske Executive Behind Baltic Unit Quits Amid Laundering Probe

“When it comes to employees, we haven’t finalized our investigations,” Andersen said by phone on Thursday. Danske’s board and management need to “try and conclude who knew what and at what time.” Investigators are also combing records for illegal transactions.

Danske’s internal probes are due to be completed in September. The bank is also cooperating with a separate investigation into money laundering allegations being conducted out of France.

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