COPENHAGEN (Reuters) - Public confidence in Danske Bank (DANSKE.CO) has dropped since it admitted to failings in its anti-money laundering controls in Estonia, according to a poll, leading investors to urge Denmark’s biggest lender to step up the pace of reform.
The percentage of Danes who find the bank credible has fallen to 63 percent this year from 70-75 percent over the previous two years, according to figures from polling firm Voxmeter shared with Reuters.
Trust in the bank is now markedly below rivals in the Danish market, apart from main competitor Nordea whose image was hit by the global Panama Papers scandal in 2016.
Major flaws in Danske Bank’s money laundering controls in Estonia made it possible for its branch there to be used for criminal activity, and the bank reacted too slowly when it was made aware of the weaknesses, Denmark’s Financial Supervisory Authority (FSA) said last month.
The bank says it has closed down the concerned non-resident accounts and is doing all it can to prevent criminal abuse.
“A case like this is obviously not positive for us, but it has not had an impact on our customer development,” group press officer Kenni Leth told Reuters.
But there has been a marked increase in criticism of the bank in the media and on social media, according to Voxmeter.
“This is a growing image crisis,” the polling company’s chief executive Christian Stjer said, adding it could affect customer numbers if it continues.
(Graphic: Danske Bank's credibility - reut.rs/2JCqGq4)
(Graphic: Danske Bank's credibility - reut.rs/2JINr7Z)
Denmark’s Conservative Party, historically an ally of the banking sector, moved a planned conference from the bank’s premises following the FSA’s report.
“It’s the combination of money laundering, Russian oligarchs and maybe even criminals, that worries the Danes,” said Leonhardt Pihl, CEO of the Danish Shareholders Association, a lobby group for private investors.
It is the worst image crisis at Danske Bank, an integral part of the Danish business elite, since 2012 when it was criticised for an advertising campaign that included symbols linked to the anti-establishment movement Occupy Wall Street.
Danske Bank has launched its own investigation into the Estonia case and will present its findings in the autumn.
But its deteriorating image increases the pressure on the bank to react much faster, Pihl said.
“They are really prolonging the agony. It’s incomprehensible that an internal investigation should take such a long time”.
Voxmeter’s survey result was based on a 12 week rolling average of responses from an average of 1,757 people per week. Its latest data point was June 4.
(Graphic: Danske Bank share price - reut.rs/2MnwfGG)
Editing by Mark Potter