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Danske Bank elects new chairman to steer it through crisis

Besides restoring Danske's image, Karsten Dybvad is also tasked with finding a new chief executive to head the bank.


DANSKE Bank elected the favoured candidate of its top shareholder as its new chairman on Friday to help steer the Danish lender through a multi-billion euro money laundering scandal.

Authorities in Denmark, Estonia, Britain and the United States are investigating payments totalling 200 billion euros (S$312 billion) made through Danske Bank's tiny Estonian branch between 2007 and 2015.

The threat of a heavy fine from the US Department of Justice has sent Danske's shares down almost 50 per cent since March, erasing around US$15 billion of market value and raising the prospect of legal action from investors.

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The Maersk shipping tycoon family, the bank's top shareholder with a 21 per cent stake, ousted chairman Ole Andersen and called Friday's shareholder meeting to nominate Karsten Dybvad, 62 and another board member. The more than 600 shareholders at the extraordinary general meeting (EGM) in Copenhagen elected Mr Dybvad to Danske's board.

The modified board of directors then elected Mr Dybvad, who for the last eight years was CEO of the Confederation of Danish Industry, one of the country's most influential lobby groups, as its new chairman.

Prior to that he had a long career as a government official working with ministers across the Danish political spectrum. "We hope and are confident that Karsten can contribute to the dialogue with authorities which probably will take up a lot of time in the next couple of years," said Robert Maersk Uggla, AP Moller Holding's chief executive, at the meeting.

Besides restoring Danske's image, Mr Dybvad is also tasked with finding a new chief executive to head the bank and ensure potential legal cases, not least in the United States, don't detract from day-to-day business.

"That's the first task," Mr Dybvad told Reuters. "We will look at this with fresh eyes so it will take some time, but then we hope we can find exactly the right CEO," he said.

Mr Dybvad declined to say if he saw current interim CEO Jesper Nielsen as a candidate for the role, although he said that he was doing a good job. When asked if he wanted the entire board - consisting of 12 members, three elected by employees - replaced as a measure to soothe US authorities and thus try to minimise potential fines over the money laundering scandal, Mr Dybvad said that two members could be elected at a general meeting in three months' time, in addition to the two on Friday. "That's practically a new board. So we'll push forward together," he said.

Outgoing chairman Mr Andersen and other managers were criticised harshly by several private shareholders at the meeting. "There were probably things that many people should have done differently, and I will of course also reflect on whether there were things I should have done differently," Mr Andersen said after the EGM, adding: "There probably is. It is probably primarily related to the recent years."

The investment firm of the Maersk family, which controls shipping group AP Moller-Maersk, is usually a passive shareholder. However, Maersk Uggla said they had acted because they felt that Danske's board had not moved fast enough to replace Mr Andersen.

The move was welcomed by others at the meeting. "We see this demonstration of active ownership as positive," said Mikael Bak, chief executive at the Danish Shareholders' Association, a lobby group for private investors. "We would have liked to see the large shareholders a little earlier, perhaps far earlier," he added.

Mr Dybvad said he had decided to prioritise his new job as chairman, stepping down from the Confederation of Danish Industry on Friday. REUTERS