The bank's costs rose, in part from its drive to tackle the compliance and money laundering control problems that have embroiled it in a major scandal.

Danske Bank, which is fighting to recover from a damaging money laundering scandal, yesterday said that its net profit in the first six months of this year fell by almost a quarter (24 per cent) year-on-year, reaching DKK7.0 billion ($1.052 billion).

The bank said that “a challenging interest rate environment” (Denmark has negative rates) and tough market conditions had affected its results. Return on equity after tax fell to 9 per cent in the first half of this year down from 11.9 per cent a year ago.

Total income amounted to DKK 22.3 billion and remained at the same level as in the first half of 2018.

Operating costs at DKK12.8 billion rose by 12 per cent from the level in the first half of 2018, primarily as a result of investments within compliance and anti-money laundering.

The Copenhagen-listed bank’s wealth management made a pre-tax profit of DKK 2.6 billion, surging by 56 per cent, mainly cased by a gain of DKK1.3 billion from the sale of Danica Pension Sweden.

“In the first half of 2019, we faced a challenging rates and margin environment as well as increased costs for compliance measures. But we also saw continued growth in lending and solid credit quality. Our focus in the coming weeks and months will be to analyse our business and strategy,” Chris Vogelzang, chief executive, said.

The bank has been in turmoil since authorities, including US investigators, started to probe into its operations for serious money laundering control lapses in its Estonia branch. The saga has reportedly embroiled other banks. Several top-ranking individuals, including former Danske CEO Thomas Borgen, have resigned. Vogelzang was appointed a few weeks ago after a tortuous recruitment process.