Danske Bank Faces Legal Challenge Over New Corporate Fees Amidst Compliance Struggles

Danske Bank has recently implemented an annual fee of €500, equivalent to NOK 5,000, specifically targeting its large corporate customers in Norway. Notably, the fee is doubled for those corporate clients with foreign parent companies, amounting to €1,000 or NOK 10,000. The bank attributes the introduction of these fees to the heightened complexity associated with providing banking services to international and larger businesses. Danske Bank cites the growing regulatory requirements and increased documentation, including the need for Anti-Money Laundering (AML) checks, as the primary drivers behind this move.

This decision comes in the aftermath of Danske Bank grappling with substantial costs to meet AML obligations, triggered by its involvement in Europe's largest money laundering scandal. The bank came under scrutiny in 2018 when it was revealed that a staggering €200 billion in suspicious transactions had flowed through its Estonian branch between 2007 and 2015. These funds were linked to clients from Russia, Azerbaijan, and Moldova, leading to a reevaluation of the bank's compliance protocols.

In response to the new fees, one of Danske Bank's major clients in Norway, Trygge Barnehager, a billion-dollar group operating approximately 200 nurseries, has expressed dissatisfaction and is considering legal action. The nursery chain is not only contesting the fees but is also demanding evidence from Danske Bank regarding the actual costs incurred for conducting AML checks on business customers.

The legal dispute hinges on whether Danske Bank's standard agreement, signed by customers upon initiation of their banking relationship, allows for the imposition of such fees. Trygge Barnehager initially faced a substantial bill, amounting to almost €88,000, given its numerous legal entities, prompting the legal action.

Danske Bank's history in Norway has been marked by challenges related to compliance. The bank experienced daily fines from the Financial Supervisory Authority, reaching NOK 50,000 a day and totaling NOK 11,910,000, before these fines ceased on March 13, 2023. In June 2023, Danske Bank decided to discontinue serving personal customers in Norway, with Nordea subsequently acquiring its Norwegian retail customer portfolio. Despite these challenges, Danske Bank continues to cater to Norwegian business customers and maintains a presence in Denmark, Sweden, and Finland for personal customers.

The imposition of annual fees on corporate customers underscores the ongoing complexities financial institutions face in navigating stringent regulatory environments. As the banking industry grapples with increased regulatory demands, Danske Bank's move reflects a broader trend in the sector as institutions seek to balance compliance efforts with maintaining operational efficiency and financial sustainability.

By fLEXI tEAM