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Danske picks a chairman with political network to rebuild the lost trust

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Danske Bank will start 2019 with one of Denmark’s most well respected and connected public figures at its helm, not a banker, as the lender charts a new course to rebuild a reputation tattered by scandal.

Karsten Dybvad, an economist who heads Denmark’s biggest industry associatio­n, was named chairman of the board on Friday. Danske’s biggest shareholde­rs including longtime investor A.P. Moller Holding had sought the ouster of financier Ole Andersen under whose watch the Copenhagen-based bank became a hub for large-scale money laundering.

The choice of Dybvad “is completely different,” said Anton Grau Larsen, co-author of a comprehens­ive study of Denmark’s power elite that ranked Dybvad as number two. His selection signals a renewed focus on banks existing to serve the real economy in real ways, he said.

“If they had chosen a foreigner or a finance guy, it would have sent a different signal,” Larsen said.

“What Danske Bank is getting is someone who is highly connected into the Danish society, and has a very high legitimacy in the Danish society. It sends a strong signal to the rest of the Danish society that we care about the legitimacy in Denmark specifical­ly.”

Danske, which generates a third of profits in Denmark, has admitted that much of about $230bn that flowed through a tiny Estonian unit in 2007-2015 was probably illicit in origin.

Whistle-blower testimony suggests the unit became a go-to money-laundering shop for clients from the former Soviet Union eager to shovel their wealth into the West.

Danish prosecutor­s filed preliminar­y charges last week, while the US Justice Department is investigat­ing the case. Investors, meanwhile, are bracing for hefty fines, and Dan- ske interim Chief Executive Officer Jesper Nielsen said last month that bankers are meeting daily with customers to stem outflows.

Speaking after an extraordin­ary general meeting Friday in Copenhagen, Dybvad said his new job “might not be that easy, and for that reason also, I will prioritise all of my time to it.”

“The overall objective is to work to regain trust in Danske Bank,” he said. The anger the bank has faced from investors, clients and the public is “understand­able,” and “we have to deal with it, we have to work with that.”

In addition to leading the Confederat­ion of Danish Industries, Dybvad has held positions at the Danish central bank, Denmark’s biggest private pension fund and the country’s economic council. He’s chairman of the Copenhagen Business School, negotiates nationwide labour agreements and has also served Denmark’s royal family in greeting foreign dignitarie­s.

Lars Peter Sobye, chairman of the Confederat­ion of Danish Industries, said Dybvad’s steady management style and his knack for getting disputing parties to reach a compromise have helped build the associatio­n into one of Denmark’s most influence business organisati­ons.

“You need to convince almost 11,000 members that you’re moving in the right direction,” Sobye said. “That requires an ability to make everybody move in the same direction with all stakeholde­rs aboard.’’

One of Dybvad’s first tasks will be to select a new chief executive officer. Nielsen, the head of Danske’s Danish banking operations, has served as interim CEO since Thomas Borgen was relieved of his duties in October. (Nielsen has signalled he may be interested in staying on permanentl­y, saying he’ll check with his family if asked by the board.)

As for the departing chairman, Larsen said Andersen will probably “disappear out of networks for quite some time” because he’s “tainted.” Though typically a firing won’t end a career in Denmark, “in this case, it’s different. It’s the scale and he didn’t handle it very well.”

 ??  ?? Newly elected chairman Karsten Dybvad is seen after Danske Bank’s crisis meeting in Copenhagen on Friday. The choice of Dybvad “is completely different,” said Anton Grau Larsen, co-author of a comprehens­ive study of Denmark’s power elite that ranked Dybvad as number two. His selection signals a renewed focus on banks existing to serve the real economy in real ways, he said.
Newly elected chairman Karsten Dybvad is seen after Danske Bank’s crisis meeting in Copenhagen on Friday. The choice of Dybvad “is completely different,” said Anton Grau Larsen, co-author of a comprehens­ive study of Denmark’s power elite that ranked Dybvad as number two. His selection signals a renewed focus on banks existing to serve the real economy in real ways, he said.

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