Copenhagen — Danske Bank, reeling from a money laundering scandal, suffered another setback on Wednesday when the Danish financial regulator rejected its candidate for CEO on the grounds that he lacked sufficient experience.

Denmark's largest bank is looking for a new leader after Thomas Borgen was ousted in September as the group struggles to deal with the scandal. Danske's board had asked the financial watchdog for its approval of Jacob Aarup-Andersen. He joined Danske in 2016 from Danica Pension and has held the post of head of wealth management since May 2018.

While the regulator found he was "well-qualified in many areas", it added that "longer experience, including within certain of Danske Bank's business areas, is needed", the bank said.

"The board of directors unanimously backed Jacob Aarup-Andersen as new CEO, knowing full well that longer experience in certain areas would have been desirable," said chair Ole Andersen in a statement, adding that the board was now talking to other potential candidates.

Jesper Nielsen, who was the head of Danske Bank's domestic banking business, will stay on as interim CEO.

Other names mentioned by analysts and media outlets as possible candidates are the CEO of Danish mortgage lender Nykredit, Michael Rasmussen, the head of European fixed income and commodities at Morgan Stanley, Jakob Horder, and Annika Falkengren, who is the former CEO of Swedish bank SEB and a partner in Swiss bank Lombard Odier.

Former CEO Borgen quit after an internal inquiry found that payments totalling €200bn, many of which Danske Bank said were suspicious, had been moved through its Estonian branch between 2007 and 2015.

Danske Bank shares hit a four-year low earlier in October after the bank said it faced a US criminal investigation into the case.