Danske Bank forgives debts for 90,000 customers

Last Updated: Aug. 31, 2022 at 4:05 a.m. ET

Danske Bank AS said Wednesday that 90,000 Danish customers that owe the bank money will have their debt balance wiped clean after discovering errors in the bank’s debt-collection systems.

The Copenhagen-based bank DANSKE, -0.63% became aware of systemic errors in its debt-collection systems in 2019 and has been working to correct past mistakes and to compensate affected customers, but as remediation has progressed new issues have emerged, extending the timeline for resolution potentially beyond 2024.

The bank said that timeframe is unsatisfactory.

“We do not find it viable for the customers or the bank to resume collecting this debt since the time and costs associated with determining the amount of debt in each individual case would outweigh the potential repayment,” it said.

Around 155,000 customer cases have previously been closed, meaning that a total of 245,000 debt-collection customers will have their debt set to zero, it added.

Danske Bank has allocated 650 million Danish kroner ($87.5 million) to compensate customers for potential overcollection and it said full-year operating expenses wil increase by around DKK600 million due to an increase in provisions for compensation while writedown of debt will lead to higher loan impairment charges of DKK650 million in the third quarter.

Despite this, Danske confirmed 2022 net profit guidance.

https://www.marketwatch.com/story/danske-bank-forgives-debts-for-90-000-customers-271661931086