Danske's $250 Billion Wealth Unit Slumps in Latest Ranking
(Bloomberg) -- The wealth management business of Danske Bank A/S took a beating in the latest survey of client satisfaction, as reputational damage from a money laundering scandal continues to take its toll.
The $250 billion unit is now ranked lowest among private banking divisions at Denmark’s five biggest lenders, according to a Prospera survey published on Friday in the finance section of newspaper Jyllands-Posten. Just two years ago, Danske topped the list.
The development comes as Denmark’s biggest bank finds itself at the center of one of Europe’s worst ever money laundering scandals, with criminal investigations under way across multiple countries, including in the U.S.
Lars Ellehave-Andersen, who looks after Danske’s wealthy clients in Denmark, attributed the slump in the bank’s ranking to the dirty money scandal, according to the newspaper. The bank admitted last month that much of about $230 billion that flowed through a tiny Estonian unit may need to be treated as suspicious.
Danske’s shares have plunged almost 50 percent this year as investors have balked at the revelations. The selloff has pushed the bank to the bottom of Bloomberg’s index of European financial stocks.
The bank has removed its chief executive officer, Thomas Borgen, for his role in the scandal and named Jesper Nielsen -- head of banking in Denmark -- as its interim head. Danske tried to appoint its head of wealth management -- 40-year-old Jacob Aarup-Andersen -- as a permanent CEO, but the proposal was rejected by the Financial Supervisory Authority earlier this month, on the grounds that he lacked the relevant experience.
In April this year, Danske pushed through a number of organizational changes at its wealth unit “to ensure an even stronger customer focus,” according to its second-quarter report. The new structure was supposed to guarantee that Danske will be able to “live up the needs of our very diverse customer base,” it said.
In a 2017 Prospera ranking, Danske was regarded by clients as the second-best bank within wealth management. This year and last, the top spot went to Nykredit Realkredit A/S, the report showed. In 2018, clients listed Sydbank A/S as the second-best bank for wealth management, Jyske Bank A/S as No. 3, and Nordea Bank Abp No. 4, one notch above Danske.
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