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Danske Bank Abandons Effort to Win U.S. Banking License

A flag flies above the headquarters of the Danske Bank A/S in Copenhagen. Photographer: Linus Hook/Bloomberg
A flag flies above the headquarters of the Danske Bank A/S in Copenhagen. Photographer: Linus Hook/Bloomberg

Aug. 9 (Bloomberg) -- Danske Bank A/S, Denmark’s biggest lender, cut three jobs in New York after deciding to abandon a four-year effort to win a U.S. banking license, according to an executive.

“It’s been a laborious process with constantly changing demands,” Jens Peter Neergaard, Danske Bank’s global head of markets, said in an interview. “We reached a conclusion that we didn’t want to pursue it any longer. It’s been very frustrating that it’s taken so long.”

Without a license Danske Bank won’t be allowed to accept deposits in the U.S. The Copenhagen-based bank doesn’t need as much dollar funding as it did when the application was made in 2009, Neergaard said. The bank might instead expand its foreign-exchange business through its U.S. broker-dealer, he said.

“The broker-dealer part has worked well for us,” Neergaard said. “We’ve gotten 200 new accounts since we got up and running two years ago and enjoy good business offering our rates and equities products to U.S. accounts.”

Chief Executive Officer Eivind Kolding said last week that he may review a goal to more than double the lender’s return on equity because central banks are keeping interest rates lower than the company anticipated.

To contact the reporters on this story: Christine Harper in New York at charper@bloomberg.net; Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net

To contact the editors responsible for this story: Christine Harper at charper@bloomberg.net; David Scheer at dscheer@bloomberg.net

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