This case study draws primarily—and in some instances quotes verbatim—from the “Report on the Non-Resident Portfolio at Danske Bank’s Estonian Branch” prepared for the Bank on September 19, 2018, by the law firm Bruun & Hjejle. Additional details are derived from other sources, including Danske Bank corporate reports and the Danish Financial Supervisory Authority’s “Report on the Danish FSA’s supervision of Danske Bank as regards the Estonia case.” This case study is intended to be used as a resource for directors at banks and financial services institutions of all sizes, so that they may learn from, and hopefully avoid, mistakes that were made in handling this matter. All errors are our own.
Danske Bank A/S (“Danske Bank” or the “Bank”) is the largest financial institution in Denmark, with operations in sixteen countries. As of December 31, 2017, the Bank had a total of 2.7 million personal customers, 211,000 small and medium-sized business customers, and 1,900 corporate and institutional customers. The Bank’s primary supervisor is the Danish Financial Supervisory Authority (DFSA) and the Bank’s operations within the European Union (EU) are subject to regulation and supervision by other national banking authorities.
Danske Bank has run into trouble resulting from alleged money laundering in its Estonian branch. Its board and management now face the daunting task of dealing with the Bank’s current difficulties.
Danske Bank was organized in 1871 and has continuously operated since then. As of December 31, 2017, the Bank had total assets of $571 billion, shareholders’ equity of $25 billion, and net profit of $3.4 billion. By contrast, Denmark’s 2017 GDP was just $329.9 billion. The Bank is classified as a systemically important financial institution by Danish authorities.
Over time, Danske Bank extended the reach of its operations from its Danish base to the Nordic region and beyond. In addition to organic growth, the Bank increased its size and scope through mergers and acquisitions. The source of the Bank’s current problems stem from its 2006 acquisition of Finnish-based Sampo Bank.
 Unless otherwise footnoted, all quotations within the case study come from the Bruun & Hjele Report. See Bruun & Hjele, Report on the Non-Resident Portfolio at Danske Bank’s Estonian branch (2018), [hereinafter Bruun & Hjele Report]
 Danske Bank, Corporate Story, at 9 (Feb. 2018),
 All totals are converted into USD from Danish Krone as listed in Danske Bank 2017 Annual Report. The exchange rate as of 12/31/2017 was used. See Danske Bank, 2017 Annual Report, at 6 (Feb. 2018), [hereinafter Annual Report].
 GDP total provided by the World Bank,
 See Exhibit A in the Appendix for a list of significant mergers and acquisitions since 1990.