Nordea CEO Vents Frustrations Days After Announcing His Exit

(Bloomberg) -- Within days of announcing he will step down, the chief executive officer of Nordea Bank Abp has revealed his thoughts on an activist investor that repeatedly slammed his firm.

Casper von Koskull, who said on June 30 that he plans to retire by late next year when he turns 60, acknowledged that the frequent public criticisms by shareholder Cevian Capital AB were “annoying.” He also said he ultimately agrees with the substance of the attacks.

Koskull's legacy at the biggest Nordic bank will be his determination to push through a dramatic shift in strategy that's involved cutting about 6,000 jobs and automating as many functions as possible. The goal was to create a more efficient bank that was cheaper to run.

But the transformation has coincided with stalling revenue growth and over $10 billion in lost market value since von Koskull became CEO in late 2015. Last year, Cevian Managing Partner Christer Gardell said Nordea's performance was “not good enough,” after slamming the bank for profits he called “way too low.”

Cevian tends, “like any activist, to get attention through the media and that is, of course, sometimes a little bit...let's call it annoying,” von Koskull said in an interview on Tuesday. “But that's an annoyance we can take. I can take that because, underlying, we really don't have a different view.”

Referring to the bank's turnaround von Koskull says, “I am frustrated. I would like this to go faster.”

Patience Running Out

In an interview with Svenska Dagbladet, Gardell continued to pile on the pressure, saying his patience with Nordea “isn't infinite.” He said replacing von Koskull was “probably good” but also underscored his desire to see an improvement in the bank's performance before a new CEO is brought in next year.

“It's no secret that Nordea is underperforming rather significantly when compared with its competitors,” Gardell told Svenska Dagbladet. “This gap must be eliminated quickly.”

Read More: Nordea Results ‘Not Good Enough' for Bank's Activist Investor

Of the job cuts first announced in 2017, Nordea targeted shedding 4,000 full-time positions and 2,000 consultancy jobs. The program was designed to play out over several years. Von Koskull says Nordea is now “maybe a bit ahead on the consultancy side, otherwise in line. But not behind.”

He has long argued that Nordea was ahead of the pack in replacing human bankers with automation and even quipped that, in about a decade, the bank industry will have lost about half its headcount.

Humans vs Robots

“From here on, in our industry, there will only be one way,” von Koskull said. “We will be less people over time.”

Von Koskull's other main legacy is overseeing Nordea's head-office move out of Sweden (after a spat with regulators there) to Finland, which is part of the euro and Europe's banking union. The decision was pushed through to give Nordea a level playing field in which to operate, the bank said.

But that move hasn't automatically resulted in a better operating environment. Von Koskull says that negative interest rates weigh on banks in Europe and a level playing field isn't yet a reality, penalizing stronger firms by propping up weaker players. The comments come as the Riksbank of Sweden commits to monetary tightening around the turn of the year, while the European Central Bank embraces more stimulus.

Read More: Riksbank Commits to Rate Hike Despite Increase in Global Risks

“You have a very dangerous environment that is actually suffocating the European banking players,” he said. “Of course, rate setting shouldn't be for the banking industry. Rates should be set for the economy. But you should understand where it leads.”

“Think about it. We don't yet have a European single banking market,” von Koskull said. “The banking union is an attempt to do it, but even within the banking union and the single supervisory mechanism, you don't yet have the level playing field.”

--With assistance from Niklas Magnusson.

To contact the reporter on this story: Rafaela Lindeberg in Stockholm at rlindeberg@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net;Kati Pohjanpalo at kpohjanpalo@bloomberg.net

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