Danske Names Head for $137 Billion Wealth Management Unitby
New head says Nordic AUM growing faster than GDP in the region
Wealth management focus comes amid years of negative rates
Danske Bank A/S said Tonny Thierry Andersen, 51, will head its new wealth management unit as Denmark’s largest lender looks for ways to generate revenue growth amid negative interest rates.
The bank, which first unveiled its plans to create the combined wealth management business from its pension and capital units in November, said at the time it would oversee more than 900 billion kroner ($137 billion) in assets. Andersen, who had been named temporary head, will continue to lead Danske’s personal banking unit until a replacement is found.
“The Nordic countries are growing faster on assets under management and wealth than GDP, and you also see that relative to other countries in Europe,” Andersen said by phone. He says Danske’s goal is to grow faster than the Nordic wealth management market. “The Nordics have a good savings rate; the demographics and the fact that people are living longer also means that they are thinking more about savings.”
Danske expects the income it generates from its wealth management business to help it reach a return-on-equity goal of at least 12.5 percent in 2018. It delivered 11.6 percent in 2015, according to the bank’s annual report.
“The return that is created on some of the products in Nordic asset management means that international investors are also looking into the Nordics,” Andersen said.
Income from traditional lending has languished as Denmark commits to negative rates to defend the krone’s peg to the euro. The central bank has left its main rate below zero for the better part of almost four years, and economists estimate rates may not go positive until 2018.
The new wealth unit starts operations on Friday and encompasses the bank’s Danica Pension, Danske Capital and private banking activities. Financial reporting for the unit will include the first quarter of 2016, the bank said.
“Wealth management is a business area that is undergoing rapid change and holds considerable potential,” Chief Executive Officer Thomas F. Borgen said in the statement. “Our ambition is to offer the best solutions in the market.”