The biggest Danish bank, Danske Bank, posted Wednesday a one percent increase in annual net profit, but investors were not impressed and sold shares in the scandal-hit lender.
Danske Bank, which also has operations in Britain and Ireland but is winding up activities in the Baltic countries and Russia, said its 2019 net profit increased to 14.3 billion kronor (1.9 billion euros, $2.09 billion).
That was in line with analyst forecasts.
"Customer activity was at a good level in Denmark especially due to high re-mortgaging activity," chief executive Chris Vogelzang was quoted in a statement as saying.
"We also saw a good customer development and lending growth across our other core markets," he added in reference to a three-percent increase in the bank's lending activities.
On the downside, "low interest rates, margin pressure, higher impairments and increased costs due mainly to investments in compliance and AML-related activities had a negative effect on the result," Vogelzang said in reference to anti-money laundering efforts. Danske Bank, which was caught in huge money laundering schemes that involved individuals based often in Russia, faces more challenges in the future.
More than 1.5 trillion Danish kroner (200 billion euros, $220 billion) transited through the Estonian subsidiary of Danske Bank between 2007 and 2015, according to an outside law firm that carried out a probe for the bank. The bank was unable to specify exactly where the money came from. It said 23 percent of the incoming funds were from Russia.
Since then, the Danish financial watchdog has also begun looking into exorbitant charges paid by Danske Bank clients and for which it has put aside four billion kronor in provisions.
Danske Bank shares have lost more than half their value since 2018 and an internal investigation on non-client accounts in the Estonian subsidiary is still ongoing.
"Our financial performance remains under pressure," Vogelzang noted. On Wednesday, the shares showed a loss of almost 1.6 percent in midday trading on the Copenhagen stock exchange, which was 1.9 percent higher overall.
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