Danske Bank to scale down business in Baltic countries

Danske Bank logo is seen in Copenhagen, Denmark in this undated Scanpix Denmark photo. Scanpix Denmark/Jens Noergaard Larsen/via REUTERS

COPENHAGEN (Reuters) - Danske Bank DANSKE.CO, Denmark's largest bank, said on Thursday it would scale down its business in the Baltic countries.

The move follows criticism of the bank for alleged flaws in its efforts to prevent money laundering in the past at its Estonia branch.

The change is not a reaction to the ongoing investigations by the Estonian Financial Services Authorities and others, but part of the bank’s overall strategy, Chief executive Thomas Borgen told broadcaster TV2 News.

The bank said that as part of its strategy to focus on the Nordic markets, it would serve only subsidiaries of its Nordic customers in the Baltics and global companies with business interests in the Nordics.

“Over time, this will reduce the size of our business in the Baltic countries,” the bank said.

The bank reported pretax profit for the first quarter in line with expectations, and kept its full-year guidance unchanged.

Pretax profit fell to 6.20 billion Danish crowns ($1.01 billion) in January-March from 7.14 billion crowns a year earlier and in line with the analysts’ 6.18 billion crowns forecast.

The bank still expects net profit for the year of between 18 and 20 billion crowns.

Reporting by Teis Jensen. Editing by Jane Merriman