In recent years Danske Bank has systematically improved compliance, risk and control capabilities and processes and sought to foster a management culture under which potential issues are raised and addressed. As a result, a number of legacy issues have been identified in which errors may have led to poor outcomes or losses for our customers.

Remediation of these cases is well underway, but to accelerate the efforts and to ensure that all cases are handled consistently and in a timely, decisive and proactive manner, as well as to make sure that learnings from each case are being applied across all cases, we are further strengthening our efforts. As part of this, a new central unit has been established with the task of overseeing the remediation of the identified legacy issues and ensuring a fully transparent approach along with timely communication with customers and other stakeholders.

“Unfortunately we cannot undo past mistakes, most of them many years old, but we can – and that is what we are doing – make sure that we right the wrongs we identify in a proactive and timely manner and ensure that we make things right for our customers. We have learned, not least from the recent debt collection case, that although we have been taking many of the right steps, we need to be able to take them faster and be more transparent towards all our stakeholders about these cases, which is what we will do,” says CEO of Danske Bank Chris Vogelzang.

The new unit will be headed by Peter Rostrup-Nielsen, who will report directly to the Executive Leadership Team and oversee progress in relation to the identified legacy issues.

“In general, we have made significant investments in and improvements of our technology, systems, processes and capabilities within risk management and compliance over recent years, which is also why we have identified past issues that need to be corrected. Some of these legacy issues are from a time when Danske Bank relied more on manual processes and controls and data quality was different from what is expected today, which makes the issues complex to solve, but that should not be an excuse. We are determined to correct any mistakes we might have made and to do it as fast as possible, as well as to compensate our customers for losses they may have had due to our mistakes,” says Chris Vogelzang.

The identified legacy issues are at different stages. In some cases, root causes and impact are still being investigated, while in other cases, compensation to affected customers is in progress. We will communicate directly to affected customers as quickly as possible and continue to keep relevant authorities, including the DFSA and other stakeholders, informed on an ongoing basis.

Main legacy issues identified include:

• While our customers always have seen the correct share price and received the correct amounts if they have traded shares, up to 27,000 retail and corporate customers across the Nordics and Luxembourg might have seen flawed estimates for profit or loss in e.g Danske eBanking or Mobile Banking due to shortcomings in an underlying it-system. This concerns a limited number of shares. A few Swedish customers have furthermore experienced wrong reporting of tax.
• Around 5,500 primarily Danish customers have experienced issues related to our handling of dividend taxes on their behalf as part of our tax services. This has resulted in significant delays for the customers with regards to Danske Bank processing and paying reclaimed dividend tax.
• Up to 3,000 primarily business customers across our markets have potentially not received the rebates on specific trades (FX trades) that was agreed, as rebates may not have been recorded correctly.
• Some customers have experienced that repayment terms are set in such a way that the term of the loan is infinite due to payments not covering interest accrued. This concerns less than 100 personal customers in Denmark and these have not been adequately advised and informed of this. We are also looking at a small number of loans with an unusually long term, in relation to which the customers may need advice and adjustment of the terms.
• In a number of cases investment strategies agreed with retail customers across the Nordic countries might have not been executed correctly due to inconsistencies between two investment management systems in use. This may have led to either a lower or higher return than the agreed investment strategy would have.
• Potential issues related to the debt collection case as communicated in September will also be overseen by the new unit.
  

The financial consequences of these matters for the bank have either already been recognised or are not material.

Danske Bank