Friday, October 30, 2020

Danske Bank picks ex-ABN banker as CEO to rebuild trust after money laundering scandal

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Danske Bank hired former ABN AMRO banker Chris Vogelzang as its new chief executive on Friday as it wrestles to limit the fallout from its involvement in one of the biggest money laundering scandals.

Denmark’s biggest lender is being investigated in Denmark, the United States, Britain and the Baltics after revealing that 200 billion euros ($224 billion) in suspicious transactions passed through its Estonian branch between 2007 and 2015.

Among the challenges facing Vogelzang, who was on the management board of Dutch bank ABN AMRO until 2017, are rebuilding investor and customer trust and keeping Danske Bank focused during the myriad inquiries into its conduct.

“In (the) short term, I don’t think he will make big strategic changes because the bank has shown it knows where it wants to go and is succeeding with its strategy,” Sydbank analyst Mikkel Emil Jensen said of Vogelzang.

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“His focus will be on re-establishing trust.”

Vogelzang, 56, will take over on June 1 from Jesper Nielsen, who was appointed as interim CEO in October after the resignation of Thomas Borgen over the money laundering scandal.

“Of course the most important challenge is now to regain the trust, so people at dinner parties or when having drinks at a pub can say with pride that they work for Danske Bank,” Vogelzang told Reuters.

“I think I bring a lot of energy and a lot of ambition in what I do. I set the bar high. I also empower people, I’m a good communicator, and I think I understand banking. I’ve seen a lot.”

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Shares in Danske Bank, which have more than halved since March last year, were trading 4.2% higher at 0849 GMT.

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Vogelzang’s appointment was immediately welcomed by Danske Bank’s largest shareholder, which put pressure on Borgen to leave when the full extent of the money laundering scandal became clear in September last year.

“We have full confidence that the board has chosen the best candidate to lead the bank forward,” a spokeswoman for A.P. Moller-Holding said of Vogelzang, who since 2017 has held advisory roles at Boston Consulting Group and Blackstone as well as non-executive directorships.

Vogelzang’s career in commerce began at Shell, moving to ABN AMRO and then being promoted to the bank’s board at a relatively young age as the previous generation of top managers left during its 2007 carve-up and the 2008 financial crisis.

He will be reunited in Denmark with his former ABN boss Gerrit Zalm, who joined Danske Bank’s board in March and sits on its nomination committee.

Vogelzang assisted Zalm in merging the Dutch parts of ABN and Fortis into a single entity and when ABN returned to the stock market in 2015 was widely tipped as his successor.

Though he had led the bank’s biggest and most profitable division he missed out on the top job in 2017, when Kees van Dijkhuizen stepped up from CFO.

Vogelzang’s appointment comes after it was revealed this week that Danish prosecutors have charged Borgen and eight former Danske Bank managers over the money laundering scandal, which has sent shockwaves across the Nordic region.

The appointment ends a seven-month hunt for a new chief. In October Danske dropped plans to appoint Jacob Aarup-Andersen, its wealth management boss, who was rejected by the country’s financial regulator on the grounds of having insufficient experience.

Sweden’s Swedbank in March dismissed its CEO over allegations that its Baltic accounts were used to launder money.

Interim CEO Nielsen will continue in his position as head of banking in Denmark and a member of the executive board at Danske Bank, which last week lowered its outlook for 2019 after a poor first quarter, due in part to the money laundering scandal.

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