The CEO of Denmark's biggest bank is out after a $235 billion money-laundering scandal

  • The CEO of Denmark’s largest bank has stepped down over an Estonian money-laundering scandal.
  • Thomas Borgen resigned after an investigation into the scandal, which affected as much as 200 billion euros’ worth, or $US234 billion worth, of transactions.
  • Danske Bank has identified 6,200 customers who may have been involved in suspicious activity undertaken via its Estonian branch.

Thomas Borgen has resigned as the CEO of Denmark’s largest bank, Danske Bank, after a major money-laundering scandal centered on its Estonian operation.

Danske Bank, which has total assets of about 475 billion euros, or $US556 billion, on Wednesday released the initial findings of an internal investigation into activities in Estonia, saying a “series of major deficiencies” had allowed the Estonian branch of the bank to be used for “suspicious transactions” from 2007 to 2015.

Borgen, who had been at the bank’s helm since 2013, said in a statement that while the investigation found no legal wrongdoing from him, he believed the best course of action was to stand down.

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” he said.

“I deeply regret this. Even though the investigation conducted by the external law firm concludes that I have lived up to my legal obligations, I believe that it is best for all parties that I resign.”

Danske Bank’s investigation into suspicious transactions at the Estonian branch centres on so-called nonresident transactions – effectively transactions done by people not based in Estonia but using the bank’s facilities there.

It said it had identified about 10,000 customers who fit the profile of nonresidents, with 6,200 of those fitting what the bank called “the most risk indicators.” Of these customers, Danske Bank said, the “vast majority have been found to be suspicious.”

It did, however, emphasise that just because a customer had “been found to have suspicious characteristics does not mean that there is a basis for considering all payments in which the customer in question was involved to be suspicious.”

As well as the initial 10,000 customers, a further 5,000 customers with nonresident characteristics have also been identified.

In total, Danske Bank says, these 15,000 customers undertook about 9.5 million payments, with the total value of the money flowing about 200 billion euros, or $US234 billion.

“The Bank has clearly failed to live up to its responsibility in this matter,” Danske Bank’s chairman, Ole Andersen, said.

“This is disappointing and unacceptable and we offer our apologies to all of our stakeholders – not least our customers, investors, employees, and society in general. We acknowledge that we have a task ahead of us in regaining their trust.”

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.