Vestjysk Bank attempted to keep secret its business relationship with a sanctioned Russian oligarch shortly before becoming part of the AL Sydbank merger.
The regional lender argued that public disclosure of the corporate account held by the sanctioned individual would risk triggering a flight of customers, according to a report by Berlingske.
The revelation casts a shadow over the integration process for AL Sydbank, which has been working to consolidate operations following the merger.
The bank’s internal assessment that reputational risk outweighed transparency obligations highlights the complex compliance challenges facing Danish financial institutions as they navigate the aftermath of sanctions on Russian entities.
This development comes as Danske Bank, the country’s largest lender, recently raised its full-year financial guidance following a strong second-quarter performance.
While Danske Bank has moved past its own historical compliance controversies, the Vestjysk Bank case suggests that legacy issues with Russian-linked accounts may still surface within the broader Danish banking sector.