Danske Bank nixes another quarter's dividends as talks with regulators continue

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Danske Bank (OTCPK:DNKEY) ADRs are dropping 1.2% after its board said on Friday it won’t 2021 dividends that it planned to pay in the first two quarters of 2022 as the bank is still unable to estimate the amount of potential settlements or fines for alleged money-laundering at its Estonian branch in 2018.

During the company’s general meeting in March, the company proposed an initial dividend payment of DKK 2 (US$0.27) per share that was paid out in March. DK 5.5 per share more were intended to be paid out in in three tranches after it released interim reports in 2022. On April 28, the board decided that Danske Bank (OTCPK:DNKEY) (OTCPK:DNSKF) wouldn’t pay dividends in connection with its Q1 report. On Friday it made the same decision for the dividend related to its Q2 report.

Earlier in July, Danksey Bank (OTCPK:DNKEY) (OTCPK:DNSKF) said it expects 2022 net profit of DKK 10B-12B ($1.4B-$1.7B), down from its previous guidance of DKK 13B-15B.

“Danske Bank (OTCPK:DNKEY) (OTCPK:DNSKF) is not yet able to reliably estimate the timing, form of resolution or amount of potential settlement of fines, which is likely to be material, and will not comment on discussions with authorities,” the company said.

The company posted H1 2022 net profit of DKK 4.6B, down from DKK 5.9B in H1 2021, and return on equity of 5.2% vs. 7.0% in the year-ago period. CET1 capital ratio of 17.1% slipped from 18.0%.

In 2019, Danske’s (OTCPK:DNKEY) CEO, Thomas F. Borgen, resigned as the probe into alleged money laundering widened to encompass $230B in transactions that flowed through its tiny Estonian branch.

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