Denmark

The two biggest banks in the Nordic region saw their market values shrink on Tuesday after publishing first-quarter results that disappointed investors, Bloomberg News reported. Danske Bank A/S said it now expects net interest income to be lower this year than in 2018 as the higher cost of funding brought on by its money-laundering scandal erodes its top line. Its shares plunged more than 7 percent after the market opened in Copenhagen. At Nordea Bank Abp, net interest income missed market expectations amid growing pressure from its biggest investors to boost revenue.

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Soon, the government of Japan might be the only issuer paying less to borrow than Danish homeowners, Bloomberg News reported. Danes are about to learn whether they can get a 30-year mortgage at a fixed rate of 1 percent. That’s less than the governments of Switzerland and Germany pay their long-term investors. Denmark finances its home loans through the world’s biggest covered-bond market. The securities are coveted as some of the safest around, thanks to the huge cover pools backing the debt.

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Scandinavians are taking a hard look at their institutions as allegations of systematic money laundering rock the entire region, Bloomberg News reported. With Swedbank AB becoming the latest lender to get dragged into a dirty money scandal that’s already engulfed Danske Bank A/S, those at the top of Sweden’s financial establishment are speaking out. Hans Lindblad, the director general of the Swedish National Debt Office, says the financial industry now risks losing the trust of the people. He says the consequences of that would be dire for the whole economy.

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Danske Bank has been forced to close all operations in the Baltics and Russia in response to the largest money-laundering scandal, which has prompted EU authorities to launch an investigation of Danish and Estonian regulators. The bank was given eight months to return customer deposits and transfer its loan contracts to another provider in Estonia, after a report released last autumn revealed the extent of the failures at the bank, the Financial Times reported.

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Denmark’s status as one of the world’s least corrupt nations is being challenged by allegations that its biggest bank, Danske Bank A/S, was a central pipeline for channeling billions in illegal funds across Europe from Russia, Moldova and Azerbaijan, Bloomberg News reported. An internal bank report is expected on Sept. 19 to detail just what happened. The biggest money-laundering scandal in modern Danish history won’t end there.
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Farmers' cooperative Arla Foods, one of the world's biggest dairy firms, plans to pay out its entire 2018 net profit of up to 310 million euros (278.48 million pounds) to its members after one of the hottest and driest summers on record. The firm, owned by 11,200 farmers in Denmark, Sweden, Germany, Britain, Luxembourg, the Netherlands and Belgium, traditionally pays only a part of its profit to owners, but said it would make an exception this year due to the drought, the International New York Times reported on a Reuters story.
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Losses for already hard-pressed Danish farmers are likely to be bigger than previously expected, an industry lobby group said on Wednesday, warning this could trigger more bankruptcies. Denmark, like many other countries in Europe, has been hit by one of the hottest summers on record, which has damaged crops and hit farmers’ income, Reuters reported. The drought, combined with low pork prices, is expected to trigger losses in the Danish agricultural sector not seen since the 2008 financial crisis.
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The financial industries of Sweden and Denmark were quick to criticize the Basel Committee on Banking Supervision’s completed framework on Thursday, arguing it will hit Scandinavian lenders too hard, Bloomberg News reported. “The Basel standards will, if they are fully implemented in the EU and Sweden, have large negative effects for Swedish banks, their clients and the Swedish economy,” Hans Lindberg, the head of the Swedish Bankers’ Association, said in a statement on Thursday.
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A group of 24 Danish institutional investors in OW Bunker said on Tuesday it would sue Carnegie Investment Bank and Morgan Stanley, accusing both of misleading them about the 2014 listing of the now bankrupt marine fuel oil supplier, Reuters reported. The investors, including two of Denmark’s largest pension funds, ATP and PFA, say they lost 767 million crowns ($123 million) after buying OW Bunker shares “on the basis of a prospectus which was insufficient in material aspects”.
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Lego suffered its worst financial performance in more than a decade, forcing the Danish toymaker to declare it would overhaul its entire organisation and cut 1,400 jobs. Coming on top of the unexpected ousting of its chief executive last month, the news suggests Lego is facing its biggest test since it came close to financial collapse in 2003-04, the Financial Times reported. Revenues fell 5 per cent in the first half of the year to DKr14.9bn ($2.4bn), their first decline since 2004.
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