The bank moves out, farming moves in
Banks were very much a Copenhagen phenomenon in the mid-1800s. If you were a farmer, you had to be content with providing for your own immediate needs. The founding of Landmandsbanken in 1871, however, gave farmers the opportunity to borrow money for production and exports. This sowed the seeds of modern agriculture and had a massive impact on the development of Danish society.
A professor of economic history tells the story – and we meet Ewers Brothers, a company that has been along for the entire ride.
Industrialisation sends Denmark on an export adventure
Denmark did not export much before Lanmandsbanken was founded in 1871. Nevertheless, the industrialisation of Denmark picked up speed as new technology evolved and business owners were better able to raise capital at the bank. However, there were bumps along the road towards our modern, globalised trade in the shape of two world wars and various international crises.
Read the history of Denmark’s industrialisation and nascent export adventure as told by an economic historian and a transport company that has progressed from handcarts in Copenhagen to become a global logistics company.
Housing boom in the suburbs and women in the labour market
The 1960s were a time of upheaval that changed Denmark in many ways. Families moved to houses in the suburbs, where new private housing estates shot up. New loan options for both housing and consumption made it possible for Danish families to attain the “villa, Volvo and ‘vovhund’ (a dog)” ideal. Meanwhile, more and more women remained in the labour market after they got married – meet one of them.
Digital innovation changes the everyday lives of Danes
Innovation has always been part of Danske Bank’s DNA – from overdrafts in the 1800s to the groundbreaking EDP machines in the 1960s and then MobilePay and our current Mobilebank. Recent decades have seen a transition from analogue and face-to-face services to digital tools – a development where banks have been among the leaders in making Denmark an international heavyweight in digitalisation.
What is more, we have probably only seen the beginning of the digitalisation story.
A Nordic bank with local roots
The bank that is later to become Danske Bank can trace its origins to the establishment of Den Danske Landmandsbank in 1871. At this time, banks in Denmark are not for ‘peasants’, and the impetus behind Landmandsbanken is to raise capital for farmers who want to progress from pure self-sufficiency to production and exports. This movement has a profound influence on Denmark’s progress towards industrialisation and later the welfare state that Denmark is today.
Kjøbenhavns Handelsbank is established by D.B. Adler, a merchant who in 1857 also co-founded Privatbanken. Handelsbanken later becomes a neighbour to Landmandsbanken at Holmens Kanal in Copenhagen. The two banks merge in 1990.
Landmandsbanken expands and becomes a major Nordic bank. The end of World War 1 leads to global deflation. This hits the Nordic countries particularly hard, as they had earned a lot of money trading with Russia and Germany during the war.
Following an economic crisis, rampant speculation and huge lending losses, Landmandsbanken is close to bankruptcy. The bank is rescued by the government and the central bank (Danmarks Nationalbank). Several of the bank’s directors are prosecuted for fraud.
Shipowner A.P. Møller becomes chair of Landmandsbanken’s board. A strong bond is established between the bank and Denmark’s largest shipping company.
A long period of deflation comes to a close after the end of World War 2 and Denmark experiences substantial economic growth. The bank expands its branch network to cover the entire country.
Danish industry grows considerably – as does the public sector, prosperity and the labour force due to women joining the labour market. The bank’s loan book grows proportionally, as does the branch network – especially after the acquisition of a number of small, local banks.
Landmandsbanken changes name to Den Danske Bank. The Danes’ appetite for foreign travel grows and so do industrial exports. This in turn causes the banks to start looking abroad. Danske Bank opens its first foreign branch in Luxembourg, later followed by branches in New York, London and Hamburg.
The Danish banking landscape begins to shift, with large banks and savings banks merging in order to be better able to service steadily expanding Danish companies. Den Danske Bank, Handelsbanken and Provinsbanken merge.
Danske Bank acquires Baltica Holdings, which also owns Danica. Baltica is divested – and the bank now offers pension and insurance services.
Our customers’ activities become more international and prompt the need for pan-Scandinavian solutions. Danske Bank’s Nordic expansion begins with the acquisition of Östgöta Enskilda Bank in Sweden.
The Nordic expansion continues with the purchase of Norway’s Fokus Bank.
Our bank changes name to Danske Bank.
The acquisition of BG Bank and Realkredit Danmark creates a Group that in the language of the time is a ‘financial supermarket’. Customers’ finances benefit from 360-degree advisory services.
Danske Bank acquires National Irish Bank in Ireland and Northern Bank in Northern Ireland.
Danske Bank acquires Sampo Bank in Finland, which in 2012 changes name to Danske Bank. Included in the acquisition are a number of Baltic banks – including the Estonian bank that later becomes the centre of Danske Bank’s money laundering case.
BG Bank and Fokus Bank are fully incorporated into Danske Bank. The Baltic banks change from being subsidiaries to branches.
The international financial crisis quickly spreads to the Danish bank sector, which faces an acute shortage of liquidity. The government’s bank rescue packages place a safety net under the banks and Danske Bank borrows DKK 24bn.
The financial crisis has an unequivocal impact on Danes’ finances and the banks consolidate their positions as capital requirements are stepped up. Danske Bank has to significantly tighten credit terms for an extended period at a time that is, among other things, marked by historically large falls in housing prices. However, the consolidation process also makes the banks better at assessing the creditworthiness of customers, which leads to significant growth in the number of healthy SMEs and overall growth in society in the years after the crisis.
New customer packages – and especially a marketing campaign under the name New Normal – antagonise Danes, who are particularly critical of Danske Bank’s role during the financial crisis.
As the first bank in Denmark and Finland, Danske Bank launches mobile banking apps for iPhone and Android smartphones.
Danske Bank launches MobilePay in Denmark and Finland. It is the first app on both markets to offer mobile payments. At first, the app offers payments between individuals, but later the solution opens up for businesses to accept MobilePay as means of payment in web shops, at points of sales and for invoices.
June makes it possible for everyone to make professional investments without knowing all there is to know about shares and bonds. It is easy for the June algorithm to determine which June fund that best matches the financial position of a customer.
The personal banking segment of the Irish portfolio is divested following heavy losses on the property market, which was hit even harder than the Danish market during the financial crisis. Focus in Ireland is now primarily on institutional customers and large business customers.
Danske Bank launches an investigation into its Estonian branch in 2017 following suspicions that systematic money laundering may have occurred. The result is published in autumn 2018 and has major consequences for the bank’s management. In 2019, Danske Bank leaves Estonia following an order from the authorities and at the same time decides to start winding down its activities in Latvia, Lithuania and Russia.
The bank discovers that a number of customers have paid an unduly high fee for the investment product Flexinvest Fri. Customers are subsequently compensated.
Danske Bank presents four goals for becoming a Better Bank for all its stakeholders – customers, employees, investors and society – going forward to 2023.
The bank uncovers an error in its debt collection system – and subsequently strengthens its efforts to correct earlier errors in customer cases.
Creating an overview of a business’s finances can be both complex and time consuming, particularly if doing so requires sourcing data from different systems and providers.
With District, Danske Bank’s digital financial platform, business customers get a full overview of their accounts, transactions, liquidity and other financial tasks – across providers and systems and on a single platform that can be tailored to suit the individual needs of the business and user. And with District, a business’s data is well protected.
District enables the individual business to create a better overview, manage its day-to-day banking activities – and save time, allowing it to focus on its core business.
Danske Bank turns 150 years old.
We continue to focus on creating value and living up to the expectations of customers, shareholders, employees and society as a whole.