Danske ex-employee: We handled as many non-resident transactions as possible

Signs coming off Danske Bank building in Tallinn Photo: Mihkel Maripuu

Mihhail Murnikov, former employee of the Estonian branch of Danske Bank, said that client managers had to handle as many transactions as possible at the non-resident unit of Danske in Estonia as it was extremely profitable for the bank, Bloomberg writes.

Murnikov, who like most of the 14 people who worked in Danske’s international banking unit in Tallinn is now a suspect in the case, says his time there was spent trying to live up to targets set by his bosses in order to earn a bonus.

"The whole non-resident business was built on one principle, everyone was making money on cross-border transactions because non-residents had to pay $90 per transaction," Murnikov said in an interview in Tallinn. Danske’s costs associated with each transaction amounted to one US dollar, he said.

By 2013, when profits peaked, Murnikov says Danske’s Estonian bankers were told to process close to half a million transactions for 4,000 non-resident clients, mostly from the former Soviet Union. That year, returns at the non-resident unit hit 402 percent, compared with about 7 percent for the whole Danske Bank group.

"I had a clear plan," Murnikov said. With the 300 clients he had, the former banker says he needed "40,000 transactions a year so I could get a bonus." He says the only metric Danske used to determine an employee’s bonus was the number of transactions he or she handled.

"You were directly motivated by getting as many clients as possible. Everything else wasn’t important," he said.

In an emailed comment sent on Sunday, a Danske Bank spokesman said: "As authorities are still investigating the matter, we cannot comment further beyond what we disclosed in the report of September 2018. As we have previously said, we should have never had the now closed portfolio of non-resident customers in Estonia." The bank shuttered the non-resident unit in 2015 and has repeatedly said it’s cooperating with the authorities.

Due to the money laundering scandal, Danske is under investigation in Denmark, Estonia, France, Germany, the United Kingdom and the United States.

The Estonian branch of Danske Bank on Oct. 1 entered into liquidation and has virtually ceased all banking activities.

In February 2019, the Estonian Financial Supervision Authority issued a precept prohibiting Danske Bank from operating in Estonia as a result of the case concerning the bank’s non-resident portfolio in Estonia from 2007 to 2015, Danske Bank said.

In this connection, Danske Bank’s branch in Estonia has on Oct. 1 entered into liquidation. "This reflects the fact that Danske Bank has effectively concluded its banking activities in Estonia, with mainly technical matters outstanding. The management now lies with a liquidation committee," the bank said.

"Danske Bank has now essentially closed all banking activities in Estonia in accordance with the plan agreed with the Estonian FSA. In this connection, a key focus of all parties involved is to ensure that the interests of the customers are safeguarded in the best possible way," Frederik Bjorn, executive vice president at Danske Bank and chairman of the liquidation committee, said.