Danske’s Biggest Holder Maersk Targets ‘Strong’ Danish Bank

A.P. Moeller-Maersk A/S, the biggest shareholder in Danske Bank A/S, said its decision to participate in the lender’s most recent share sale was based on a goal of ensuring Denmark has a strong flagship lender.

Danske, Denmark’s biggest bank, raised gross proceeds of about 7.15 billion kroner ($1.26 billion) in October to build its capital ratio and persuade rating companies to upgrade its debt. Maersk, which has said its investment in Danske needs to be self-financing, took part pro rata in the private placement to maintain its 20 percent stake.

“We participated because we believe Denmark needs a strong bank that’s based in Denmark and we wanted to support that,” Maersk Chief Executive Officer Nils Smedegaard Andersen said in a Feb. 22 phone interview from Copenhagen.

The endorsement follows weeks of criticism in local media after Danske introduced a price strategy that rewarded clients who do the most business with the bank. While newspapers including Jyllands-Posten and Borsen said Danske was losing customers because of the move, investors welcomed the step. The bank’s stock price has risen 12 percent this year, beating a 7 percent increase in the 40-member Bloomberg index of European financial companies.

“If Danske Bank needs more capital, which is not something we have any reason to expect will happen right now, we would probably get an approach from the bank,” Andersen said. “We will take a decision if it happens.”

Twice GDP

Maersk also participated pro rata in Danske’s 2011 share sale, which generated gross proceeds of about 20 billion kroner. Andersen is defending Maersk’s ownership in a bank whose total assets are twice Denmark’s gross domestic product as the nation struggles to surface from a regional banking crisis that has claimed more than a dozen lenders since 2008.

At the same time, Denmark’s banking crisis is widening the divide between the country’s biggest lenders, which are building up capital and winding down bad loans, and regional lenders too small to attract investors.

Danske Bank saw a fivefold surge in net income to 1.15 billion kroner last quarter as impairments dropped. The bank is eliminating 3,000 jobs to stay competitive, as it closes branches and cuts back on corporate lending.

Yet the split between investor and customer perceptions of Danske looks set to continue. The bank scored lowest in a Voxmeter customer satisfaction survey of any company in the five years the pollster has conducted the study, Jyllands-Posten reported on Feb. 6. The bank has lost about 100,000 private customers in the past year, the newspaper said.

Loan Market

Danske fell 0.6 percent to 107.20 kroner today in Copenhagen trading. The shares have gained 19 percent since October’s share sale compared with a 14 percent advance in the Bloomberg Europe Banks and Financial Services Index.

Danske Bank’s share of the Danish loan market was about 28 percent last year, unchanged from 2011, according to its Feb. 7 annual report. It has 5 percent of both the Swedish and the Norwegian markets and 11 percent in Finland.

Maersk, Denmark’s biggest company comprising about 1,000 subsidiaries and employing 117,000 people, invested 9.7 billion kroner in its divisions last year. About 90 percent of that amount went to its four main units, shipping, oil, drilling rigs and terminals. The company plans to invest about 9 billion kroner in 2013, it said.

Before it's here, it's on the Bloomberg Terminal.