Danske Bank cuts 50 jobs in FX, fixed income business

COPENHAGEN (Reuters) - Danske Bank DANSKE.CO said on Thursday it has cut about 50 jobs in its foreign exchange and fixed income business as part of a broader exercise to cut costs.

FILE PHOTO: A Danske bank sign is seen on a bank's headquarters in Copenhagen, Denmark October 22, 2019. REUTERS/Nikolaj Skydsgaard

Danske Bank’s new chief executive Chris Vogelzang said earlier this month that the bank needed to cut up to 15% of staff-related costs in FX and fixed income in the short term.

Denmark’s biggest bank has lost customers and warned of lower than expected earnings since reports emerged in 2017 of its involvement in one of the world’s biggest money-laundering scandals via its Estonia branch.

The cost reduction, which is part of a wider restructuring of the bank’s FX, equity and fixed income units, was mainly achieved through job cuts, Jakob Groot, head of Corporate & Institutions, said.

“Unfortunately this has meant that we said goodbye to several good colleagues today,” he told Reuters, adding that his division had achieved the targeted cost savings with Thursday’s staff reductions.

“This has nothing to do with the Estonia case,” Groot said.

The cost cuts are the result of a combination of very low interest rates, lower market volatility and digitalisation in the financial industry, he said.

The staff cuts included Danske’s global head of foreign exchange Niklas Karlsson.

“This is part of the restructuring at the bank, and I was unfortunately left out,” Karlsson told Reuters.

“The management sets the team. I have been very, very happy working at Danske and have absolutely nothing bad to say about the bank,” said Karlsson, who had spent 19 years at the bank.

Danske introduced a hiring freeze last month to cope with rising compliance costs and a tough business environment, which has also prompted three cuts to its annual outlook this year.

Reporting by Jacob Gronholt-Pedersen; Editing by Edmund Blair and Jane Merriman