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Why bank CEOs will put off the IT challenge

Digital overhauls at ING and Nordea will not tempt others to follow.


The decision by Nordea chief executive Casper von Koskull to retire next year, at the age of 60, might give other senior bankers pause for thought.

Nordea is the biggest of the Nordic institutions that until recently were the poster children of European banking. However, a series of anti-money laundering scandals put paid to their reputation for virtuousness.


Casper von
Koskull, Nordea

Yet even within Scandinavia, Nordea has not been able to fully exploit its relative immunity (so far) to those scandals. Indeed, Norway’s DNB is now bigger by market capitalization.

Nordea’s shares have also not beaten its Nordic peers, despite the greater money-laundering problems at other banks.

This is because of its performance on revenues and especially costs. Revenues for the first quarter of 2019 were largely unchanged year on year while costs rose by 5%. Operating profit was down 36% from the fourth quarter of 2018.

Underlying this disappointing performance is a transformation project, launched under Von Koskull, to better integrate the banks Nordea owns across Scandinavia, notably by replacing the dated spaghetti of its core banking IT system with a single new one – something very few bank chief executives dare to do, and perhaps for good reason.

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