Danish bank CEO quits amid money laundering scandal

The chief executive of Denmark’s largest bank has resigned amid findings of possible money laundering.

Thomas Borgen stepped down as an internal report into allegations of massive money laundering via Danske Bank’s Estonian branch showed that “the vast majority” of transactions “have been found to be suspicious”.

Danske Bank commissioned the probe last year after reports of dirty money flowing through its Baltic subsidiary including from family members of Russian President Vladimir Putin.

The findings published on Wednesday show that some 200 billion euros (£177 billion) moved through its unit in Estonia.

“Overall, we expect a significant part of the payments to be suspicious,” the report said.

Mr Borgen said: “Danske Bank has not lived up to its responsibility in the case of possible money laundering in Estonia. I regret that deeply.”

He said that despite being cleared personally by the report “I think the right thing for all parties is that I resign”.

Danske Bank said the probe “has analysed a total of some 6,200 customers found to have hit the most risk indicators. Of these, the vast majority have been found to be suspicious”.

It added that the fact that a customer has been found to have suspicious characteristics “does not mean that there is a basis for considering all payments in which the customer in question was involved to be suspicious”.

The investigation by a Danish law firm dealt with a total of approximately 15,000 customers and 9.5 million payments, and searched 12,000 documents and more than 8 million emails.

Saying the bank cannot provide an accurate estimate of the amount of suspicious transactions made by non-resident customers in Estonia, the bank decided to donate the gross income from the customers in the period from 2007 to 2015, which is estimated at 1.5 billion kroner.

In May, Danish regulators said there had been “serious shortcomings” in the anti-money laundering activities of Danske Bank in Estonia. Danske Bank was reprimanded and given eight orders to be fulfilled by June 30.

Denmark’s top prosecution authority eventually opened a criminal investigation for “possible violation in connection with money laundering,” adding that this was to establish whether Danske Bank can be prosecuted before courts of law.

“As CEO, I have the managerial responsibility for what is happening in the bank, and of course I take it,” said Mr Borgen, who joined the Copenhagen-based bank in 1997 and and became its CEO in September 2013.