Danske Firing of CEO Follows Failure to Improve Ratings
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Within months of becoming Danske Bank A/S chief executive officer last year, Eivind Kolding was telling investors they could look forward to higher credit ratings to enhance their returns.
The upgrades never came. Instead, owners absorbed $1.3 billion in new shares in October to help Denmark’s biggest bank meet stricter capital rules. Danske then became embroiled in a battle with the Financial Supervisory Authority over an order to add as much as $18 billion to risk-weighted assets as it awaits national laws dictating extra reserve requirements for too-big-to-fail banks. Chairman Ole Andersen, who yesterday fired Kolding, said Danske needs a ratings upgrade to help lower funding costs.