Sunday, 23 October 2016
Last updated 2 days ago
Jan 31 2012 | 5:53pm ET
Denmark's second-biggest bank has taken a big hit in its bottom line, thanks to the country's second-ever class-action lawsuit.
Jyske Bank said it put aside 229 million Danish kroner (US$40 million) to cover any possible liability from the lawsuit, filed by angry investors in one of the bank's hedge funds. That, combined with a 299 million kroner write-down of its exposure to Greek sovereign debt, cut Jyske's profit by 40% to 601 million krnoer.
Jyske pronounced the results "tolerable considering the economic situation and the adverse effect from special circumstances of just below 500 million kroner on the profit."
Jyske said last week that it planned to appeal the Danish High Court decision allowing the class-action to the country's Supreme Court, and that it would review other legal options.
Investors have sued the bank over the Jyske Invest Hedge Markedneutral-Obligationer levered bond fund, which lost 800 million Danish kroner in performance terms in 2008. Jyske has already been sued 43 times over the hedge, losing 25 of those cases, and in 2009 was reprimanded by the Danish Financial Supervisory Authority for providing an "insufficient description" of the fund to clients.