Eivind Kolding Resigns as CEO of Danske Bank

Eivind kolding danske bank
Eivind Kolding, image: Dankse Bank

Sept. 16 (Bloomberg) — Danske Bank A/S said Eivind Kolding will step down as chief executive officer today as the board replaces him with a candidate it says has a deeper understanding of banking.

Kolding, 53, who became CEO of Denmark’s biggest bank in February last year, will be replaced by Thomas F. Borgen, who has worked at the bank since 1997 and is a member of its executive board responsible for corporate and institutional banking, Copenhagen-based Danske said in a statement.

“We are now in a phase where the key focus is to transform the bank into being even more customer oriented,” Danske Bank Chairman Ole Andersen said in the statement. “The board of directors has assessed that, notwithstanding Eivind Kolding’s professional and personal qualities, it is in this phase necessary to have a CEO with stronger qualifications within banking.”

Since being dragged through housing bubbles in Ireland and its home market in Denmark, Danske has focused on cost cuts to boost profit amid rising capital requirements and record-low interest rates. Under Kolding, who led A.P. Moeller-Maersk A/S’s container shipping unit before becoming CEO at Danske, the bank introduced a new pricing model designed to reward customers who did the most business with the lender. Kolding was vice chairman of Danske’s board of directors from 2005 until 2011, the year he became chairman.

Customer Disapproval

A February survey showed Danske dropped a level to third place in a Prospera customer satisfaction ranking on Danish corporate banking, published by Borsen. The bank was beaten by Swedish lenders SEB AB and Nordea Bank AB.

Borgen, 49, “is an experienced and customer-oriented banker, who knows how to run a modern bank,” Andersen said. He has “ a strong focus on goal-oriented execution in close collaboration with the board of directors, the executive management and the employees.”

Borgen, who was CEO of Danske’s Norwegian unit, Fokus Bank ASA, from 2001 until 2009, was “quite successful” in that role, said Christian Hede, an analyst at Jyske Bank A/S. “He doesn’t have anything to do with the bad loans in Ireland or Denmark, so to that extent, he’s clean.”

Danske shares rose 2.2 percent as of 10:17 a.m. in Copenhagen to 118.90 kroner. The stock has gained 24 percent this year, beating a 15 percent increase in the 44-member Bloomberg index of European financial companies.

The CEO switch “makes sense,” Jesper Christensen, an analyst at Alm. Brand, said by phone. “The company has been through a transition phase, it has a new strategy in place, and now it just needs someone to implement it. You need someone with deeper operational insight.” Christensen is advising clients to buy Danske shares.

– Frances Schwartzkopff and Peter Levring, Copyright 2013 Bloomberg.