Danske Bank’s shares rose steeply this morning despite profits plunging a massive 42 per cent in the third quarter off the back of a money-laundering scandal.
The news comes as Danish authorities announced a separate investigation into the bank's role in a tax-avoidance scheme.
The company’s profit before tax took a major hit, dropping from 6.2bn Danish krone (£734m) to 3.6bn krone in the third quarter.
Profits were tripped up after the bank announced it would give away all its income from suspicious activity in its Estonian branch between 2007 and 2015.
The 1.5bn krone donation will be used for efforts to combat international financial crime in Denmark and Estonia.
Income for the quarter dropped four per cent to 11.1bn krone.
Shares rose over four per cent on the news this morning.
Why it’s interesting
The under-fire bank has been left rudderless as money-laundering allegations claimed the scalp of chief executive Thomas Borgen, wiped half the value off its share price, and dented confidence in the institution.
An attempt to replace Borgen was blocked by Danish authorities last month who said head of wealth management Jacob Aarup-Andersen is too inexperienced to take over.
The costs of the bank’s own investigation into the money-laundering scandal also consumed part of its bottom line in the quarter.
This afternoon authorities announced they were looking into Danske, alongside fellow Nordic banks Nordea and SEB, for its alleged role in a separate tax-avoidance scheme.
Danish tax minister Karsten Lauritzen announced today that 420 people and companies have been summoned in the so-called dividend scandal.
He said the authorities have frozen 3.3bn krone in assets, suspecting they were part of 12.7bn krone in fraudulent tax returns.
“I am normally a north jute with a good temper, but right now I am angry,” the minister said.
What Danske said
Interim CEO Jesper Nielsen said: “Expenses were higher, among other things as a result of our decision to donate DKK 1.5 billion, corresponding to the gross income from the Estonian non-resident portfolio, to initiatives aimed at combating financial crime. Also internally, we continue to invest significantly both in measures aimed at making it as difficult as possible to use Danske Bank for financial crime and in drawing the necessary learnings from the Estonia case.
“This is something we take very seriously, and we know that we have a huge task ahead of us in restoring the trust of our customers and society."