As Denmark’s banking crisis continues to unfold, it is becoming increasingly clear many bankers are facing a very uncertain future over the next few years.
According to Henning Kruse Petersen, chairman of Denmark’s Financial Stability Company, around 75 of the country’s 90 local banks will need to disappear if the financial sector is ever to regain its feet.
His prediction last month came in the wake of jobs warnings by both Jyske Bank and Danske Bank and, earlier this year, the failure of Amagerbanken.
Nevertheless there is some good news. For ambitious bankers working at any of the big names (and especially those with some international experience under their belts), it is unlikely to be you facing the chop, according to observers.
With a population of only around five million, having near to 100 banks is simply unsustainable and Petersen is right there will probably need to be a major retrenchment, suggests Stig Nymann, analyst at Alm. Brand Markets in Copenhagen.
But, just as the Danske and Jyske cuts look set to fall primarily on retail and administrative roles, the victims in this case will be small, very localised operations.
“If you have a bank that is located in a region where business is not good, for example some of the more rural areas of the country, then it may be struggling. But for a professional banker looking at the market I don’t think it will have that much of an effect,” he explains.
“Danske Bank has its problems, and if it can’t hire the right people that will only make things worse. But then the situation for jobs isn’t exactly great in many places right now,” he adds.
Irrespective of the local consolidation, Denmark remains an attractive destination for non-Danes, especially because it has very low taxation, agrees another Danish analyst.
“For international bankers looking to come to Denmark it is not going to affect things. And for domestic bankers, if they have international ambitions then this is not going to change things either,” he explains.
“The international perception of the banking crisis in Denmark is worse than it is among Danes, so it is quite a fragmented picture. But overall I don’t think that having worked at a Danish bank in itself will be seen as a black mark on a CV,” he adds.