Danske Bank Fires Head of Treasury One Month After Ousting CEO

Danske Bank A/S fired its head of treasury less than a month after ousting its chief executive officer as Denmark’s biggest lender carves out a new strategy.

Danske dismissed Steen Blaafalk, ending the 52-year-old’s three-decade-long career at the Copenhagen-based bank. Blaafalk confirmed by phone today that he has left the bank, while declining to comment further. The firing comes less than a month after Danske named Thomas F. Borgen to replace Eivind Kolding as chief executive officer.

“We can confirm that he has left the bank,” Niels Overgaard, a Danske spokesman, said by phone. “We cannot say anything more than that.” He also declined to say whether the firing is part of a broader management review at the bank and didn’t say how Danske will go about replacing Blaafalk.

Borgen, who became CEO after leading Danske’s corporate and institutional banking unit, said in an interview this month the lender’s performance over the past five years “has not been satisfactory” as he unveiled a set of measures to revive business. Blaafalk had struggled to bring down the bank’s funding costs amid stricter capital requirements. Danske most recently called a hybrid bond after the security lost its equity content following a review by Standard & Poor’s.

Management Upheaval

Blaafalk’s departure marks the sixth member of the bank’s top management to leave since the beginning of last year.

“It’s only natural that Thomas Borgen wants to put together a management team of his own, being the incoming CEO,” Christian Hede, an analyst at Jyske Bank A/S, said by phone. “But Blaafalk leaving markets creates the fourth vacancy in the top 10 jobs of the bank, so now he’s got plenty of options to set that team of his.”

Danske’s management upheaval follows a series of setbacks starting with the lender’s expansion into Ireland at the height of the nation’s property bubble. The bank’s international ambitions, under then CEO Peter Straarup, put the entire Danish economy at risk, according to a report last month by a government-appointed committee investigating the causes of Denmark’s financial crisis.

Under Kolding, who was fired last month after Chairman Ole Andersen said he lacked the relevant banking expertise, Danske lost customers after introducing a new pricing model that rewarded customers with the most business there.

The plan, and an advertising campaign to promote it, was slammed by local media and Danske in June fired its head of communications, Eva Hald.

Danske has struggled to compete with its Swedish competitors in delivering investor returns. Danske shares have gained 20 percent in the past five years, according to data compiled by Bloomberg. That compares with a 37 percent increase at Stockholm-based Nordea Bank AB. Danske hasn’t paid its shareholders a dividend in the period and it delivered a return on equity in the first six months of 2013 that was about half a 12 percent target the bank has said it’s working toward.

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