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Friday 22 February 2019

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Danish ATP raises stake in Danske Bank after scandal

Written by Sunniva Kolostyak
08/02/2019

Denmark’s pension provider ATP has increased its investment in Danske Bank in order to be an active owner of the bank surrounded by scandal.

According to Reuters, ATP increased its stake in Danske Bank at the end of 2018, from 1.05 per cent to 1.8, most of the increase happening after the scandal of the bank’s Estonia branch was revealed.

An investigation into the branch found evidence of over €200bn suspicious payments going through the bank between 2007 and 2015 and Danske Bank is now being investigated in Denmark, Estonia, Britain and the United States. The scandal has caused the Danish bank’s shares to halve over the past year.

In an interview with Reuters, ATP’s interim chief executive, Bo Foged, said that when the provider is “investing in shares, we are investing in the future not the past.”

“We’ve been in close contact with the company at different levels and felt secured that the ongoing cleanup process will deliver the expected results,” Foged said.

The fund also said in its Annual Announcements of Financial Statements 2018 that through constructive dialogue, companies can be encouraged to change, minimising risks and promoting long-term value creation.

It said this has been the case in the laundering scandal as well. “ATP has exercised active ownership by putting pressure on the company and by seeking solutions in partnership with other investors. Faced with the choice between dialogue and exclusion, ATP prefers dialogue, as long as a potential for improvement is believed to exist.”

ATP has recently been criticised for entering into co-ownership with Australian Macquarie of Danish telecoms group TDC because of a pending investigation of the investor’s involvement in dividend stripping.

In addition, Foged’s predecessor Christian Hyldahl stepped down in November following criticism of the tax policies of a bank unit he ran a decade ago.

ATP’s investment portfolio recorded a negative return of DKK 3.7bn (€496m) in 2018, a negative 3.2 per cent of the bonus potential. However, the provider said in a statement that the balanced investment portfolio, including government and mortgage bonds and illiquid investments made positive contributions. Listed international equities were the main detractors.



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