COPENHAGEN: Danske Bank has dismissed the head of its domestic Danish banking activities, Jesper Nielsen, a former interim chief executive, after customers were overcharged for an investment product.

The case is another reputational blow to Denmark’s biggest lender which is currently trying to limit the fallout from its involvement in a major money laundering scandal.

New Chief Executive Chris Vogelzang, who took charge at the start of June, apologised for the mistakes made.

“Every single day, we must strive to ensure that we offer our customers proper advice and products that suit their needs,” said former ABN AMRO banker Vogelzang in a statement.

“As a result of misguided management decisions, we failed to do so in this specific matter, and for this we offer our apologies,” he added.

Danske will compensate around 87,000 customers who invested in the product for an amount of around 400 million Danish crowns ($61 million). Its shares traded 2.7 per cent lower by 7.10 GMT.

The fees for the Flexinvest Fri product were raised in connection with the implementation of the MiFID II financial industry regulation in 2017.

“He [Nielsen] was at the time one of the responsible Executive Board members who did not to a sufficient degree ensure that the Flexinvest Fri product was suitable for the bank’s customers,” Chairman Karsten Dybvad said in a statement.

“Therefore, we find that Jesper cannot continue in his position,” added Dybvad, who took up his role last year.

Nielsen served as interim CEO after former chief executive Thomas Borgen resigned last year when an investigation revealed payments totalling 200 billion euros (Dh835.05 billion) through its small Estonian branch, many of which the bank said were suspicious.