Nordea Replaces CEO Amid Growing Pressure to Revive Revenue
Nordea Replaces CEO Amid Growing Pressure to Revive Revenue
(Bloomberg) -- Nordea Bank Abp named Frank Vang-Jensen as its new chief executive officer in an effort to restore revenue growth after years of painful restructuring.
The 51-year-old Vang-Jensen, who comes from a job as head of personal banking at Nordea, will start with immediate effect, the bank said on Thursday. He replaces Casper von Koskull who had announced a plan to retire once a successor was found. Von Koskull will stay with the bank until 2020 to help with the transition, the bank said.
Nordea shares rose as much as 3.3%, the most in eight months, and traded close to the top of Bloomberg’s index of European financial stocks.
The biggest Nordic bank has been slammed by its shareholders after efforts to be more efficient failed to deliver the results they’d hoped for. Activist investor Cevian has repeatedly ripped into Nordea for not delivering revenue growth, while the bank’s biggest owner, Sampo Oyj, has also pointed to the need for a stronger performance. The new CEO will be under shareholder pressure to double the return on invested equity, and to cut costs faster.
“Nordea has potential that is not fully utilized today,” Vang-Jensen said in a statement. “We need to quickly and continuously create new revenues and increase cost efficiency. And we need to continue to develop the customer experience.”
Deep Cuts
Nordea has hardly brought down costs, despite trying to push through deep cuts that included axing thousands of jobs. Meanwhile, revenue has started to slip and Nordea’s efforts to save money have left it exposed in some corners, allowing competitors to take market share in key areas such as retail and corporate banking.
Von Koskull spent his 3 1/2 years at the helm of Nordea overseeing an historic restructuring. His focus has been on automating as many functions as possible, something he says the rest of the finance industry will need to do too, if it’s to stay profitable. He also focused on responding to mounting regulation first by turning the bank’s operations into branches from subsidiaries and then moving the headquarters inside the euro-area banking union and under European Central Bank oversight.
Vang-Jensen joined Nordea in 2017 as head of personal banking and country senior executive for its Danish operations. Last year, he was promoted to head of personal banking and a member of group executive management.
But his career has also suffered a few bumps. Before Nordea, he worked at Svenska Handelsbanken AB, where he was removed as CEO in 2016, after less than 18 months on the job. The bank’s chairman at the time said that running Handelsbanken had simply become “too hard” and “too big” for Vang-Jensen, preventing him from fulfilling the role’s requirements.
The board of Nordea sees Vang-Jensen’s stint at Handelsbanken “as a very valuable experience, and one that possibly has made him an even better leader,” Chairman Torbjorn Magnusson told reporters in Helsinki. “He can still bring external perspective and fresh ideas to Nordea.”
Comeback Kid
“As a ‘comeback kid,’ Vang-Jensen left the CEO post at Handelsbanken in a rather humiliating way,” said Joakim Bornold, savings adviser at Soderberg & Partners. “But the traits he was criticized for are probably the same traits that made him CEO of Nordea.”
According to Bornold, Vang-Jensen is known for being “driven, responsible and fearless in making decisions. He is probably a good choice who can take over the baton and continue to streamline and modernize Nordea.”
Von Koskull said he is “convinced that the board has made the right selection and that Frank Vang-Jensen will have the professional and personal skills to lead Nordea to the next level.”
To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net;Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net;Hanna Hoikkala in Stockholm at hhoikkala@bloomberg.net
To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net;Jonas Bergman at jbergman@bloomberg.net
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