Danske Bank Starts Hiring Freeze in Face of Costs, Low Interest-Rate Environment
October 10 2019 - 12:14PM
Dow Jones News
By Sabela Ojea
Danske Bank AS (DANSKE.KO) on Thursday said it has implemented a
hiring freeze across the bank's units as it grapples with a low
interest-rate environment and rising costs related to battling
financial crime.
"As we said earlier this year, our costs have risen, especially
in connection with expenses related to fighting money laundering
and financial crime, and we are, as all banks, challenged by low
rates, low margins and challenges related to digital
transformation," a spokesman said.
The Danish bank, which has said it would spend up to 2 billion
Danish kroner ($294 million) in compliance costs over a three-year
period, clarified that business-critical roles wouldn't be affected
by the freeze. The bank didn't specify how long the hiring freeze
would last.
Danske Bank is being investigated by authorities in the U.S. and
Europe for allegedly facilitating the laundering of about 200
billion euros ($219.5 billion) to at least 15,000 non-Estonia
residents--primarily Russians and Azerbaijanis--through its branch
in Tallinn between 2007 and 2015.
The Danish bank has admitted there were "major deficiencies in
controls and governance that made it possible to use Danske Bank's
branch in Estonia for criminal activities such as money
laundering."
The bank has also said that its reaction to a 2014 whistleblower
relating to the Estonian branch was "manifestly insufficient and
inadequate."
The Estonian Financial Supervision Authority prohibited Danske
Bank from operating in Estonia in February, and the bank ceased its
operations in Russia, Latvia and Lithuania, too.
Last month, former Chief Executive of Danske Bank's Estonian
branch Aivar Rehe was found dead near his home. Mr. Rehe headed the
branch in Estonia between 2006 and 2015.
Write to Sabela Ojea at sabela.ojea@wsj.com
(END) Dow Jones Newswires
October 10, 2019 11:59 ET (15:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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