DNB bank refunds savers for bad deals
Norway's biggest bank DNB said Wednesday it would compensate hundreds or even thousands of savers after the Supreme Court ruled it misinformed its customers about some of its products.
The move could cost the bank several hundreds of millions of kroner (tens of millions of euros or dollars), at a time when the bank is striving to increase its core capital and has announced cuts across the board.
"We are now going to clean things up and follow the instructions outlined in the ruling," DNB chief executive Rune Bjerke said in a statement.
On March 22nd, Norway's Supreme Court ordered DNB to reimburse 230,000 kroner ($40,000), plus interest and court costs, to a plaintiff who accused the bank of losing his investment of that amount some 10 years ago by selling him products described as "guaranteed".
But the information the bank provided him was partially incorrect.
The case was seen as a test run for thousands of similar cases.
The Norwegian Financial Services Complaints Board has asked DNB and other financial institutions to re-examine each individual complaint in light of the Supreme Court ruling.
On Wednesday, Bjerke said DNB would immediately compensate around 300 people who had invested in similar products and who had also reported their cases to the Complaints Board. That was expected to cost the bank around 60 million kroner.
DNB said it would also try to track down savers who bought the products but did not report their losses to the Complaints Board. They could number in the thousands.
"It'll come down to several hundred millions of kroner," a bank spokesman, Thomas Midteide, told business daily Dagens Naeringsliv.
DNB's share price was down by 0.40 percent in mid-afternoon trading on the Oslo stock exchange in a market up by 0.44 percent.