BANKING SYSTEM OF DENMARK

Since 1982, the Danish money and capital markets have under-gone a process of internationalization, and today they fulfill all of the EU requirements regarding the free movement of capital and cross-border trade in financial services. One of the main features of the Danish financial market is a very large bond market, relative to the country’s size, stemming from an unusually widespread issuance of mortgage credit bonds.

Danish banks have become increasingly concentrated over the past decades. The number of banks reached its peak in the 1950s, with about 160 commercial banks and 475 savings banks. Since the mid-1980s, their number has fallen sharply; in 1989, six of the largest banks merged into two large commercial banks, Danske Bank and Unibank. The most recent major mergers were Danske Bank’s merger with BG Bank, Denmark’s third-largest bank, and Unibank’s merger with the Finnish-Swedish bank Merita Nordbanken to form Nordea. Both took place in 2001.
At the end of 2002, Denmark had 186 banks. At that time, the five largest banks collectively had a market share of 81 per cent, as measured by lending volume.

The banking sector in Denmark runs on state-of-the-art technology, as is evident in the services it offers both in the domestic market and abroad. Denmark has always been dependent on foreign trade, and the business policies of its banks have therefore been internationally oriented.
Four Danish banks have foreign branches, and a number of foreign banks either are directly represented in Denmark or have announced plans for cross-border services here.

Banking business is governed by the Danish Banking Act, and banks operate under the supervision of the Danish Financial Supervisory Authority, which is a directorate under the Ministry of Business and Industry.
Denmark’s Nationalbank is an autonomous institution whose objective is to maintain a secure monetary system and to facilitate and control the circulation of money and the lending activities in the country. The central bank is responsible for Danish monetary policy, for the tactical management of government debt and currency reserves, and for issuing notes and coins.
Current Denmark's banking system is open to foreign competition and largely independent of government. The same rules apply to commercial and savings banks, and banks may provide services in a wide variety of areas including mortgage financing, stock trading, leasing, factoring, investment, real estate, and insurance. As of the end of 2004, there were about 160 banks, in Denmark, with the five largest accounting for 82 percent of market turnover. Danske Bank is the largest bank in Denmark and a leading player in the Scandinavian financial markets. Nordea is the second largest bank in Denmark with a nationwide network of 344 branches. The assets of the two largest banks, Danske Bank and Nordea Danmark, amounted to approximately USD 259 billion in 2003 corresponding to approximately 73% of the total assets in the Danish banking sector. The major Danish banks are rated by international agencies and the creditworthiness is very high by international standards.

Some of the major banks operating in Denmark:

- ABN AMRO
- Barclays Capital
- Danske Bank
- Deutsche Bank
- Fionia Bank
- HSH Nordbank
- Jyske Bank
- Nordea Bank
- Nykredit Bank
- The Royal Bank of Scotland
- Spar Nord Bank
- Sydbank