October 10, 2019 / 8:59 AM / 13 days ago

Danske Bank stops hiring new staff amid higher compliance costs

FILE PHOTO: Danske Bank sign is seen at the bank's Estonian branch in Tallinn, Estonia August 3, 2018. REUTERS/Ints Kalnins/File Photo

COPENHAGEN (Reuters) - Danske Bank (DANSKE.CO) has started a hiring freeze to cope with rising compliance costs and a tough business environment, the bank said on Thursday.

Danske Bank has been rocked by its involvement in a major money laundering scandal. It said last year it had channeled 200 billion euros ($220 billion) of payments through its Estonian branch between 2007 and 2015, many of which the bank said were suspicious.

The bank said in February it would spend up to 2 billion Danish crowns ($295 million) to step up anti-money laundering efforts, such as improving IT systems and hiring compliance staff.

“The hiring freeze comes after we’ve seen higher compliance costs and costs related to our anti-money laundering efforts,” a spokesman said.

“This is part of our ongoing focus on costs, as we, like all other banks, are challenged by low interest rates and low margins,” he said.

The hiring freeze would not include critical positions such as regulatory jobs, the spokesman said. He did not say how much it would save on the hiring freeze or how long it would be in place.

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

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