Wikimedia Commons/Finn Årup Nielsen
Investigators at Denmark’s largest bank are studying around $150 billion of transactions that flowed through its Estonian outpost between 2007 and 2015 as part of an internal money-laundering probe, according to people familiar with the matter.
Much of that figure, which dwarfs Estonia’s total deposits, came from companies with ties to Russia and the former Soviet Union.
Danske Bank A/S DNKEY, -5.00% DSN, -0.60% has been criticized by its regulator for lax oversight of illicit money flows. The bank’s investigators haven’t determined if all $150 billion handled by non-Estonian entities should be deemed suspicious. But such a large flow of money suggests that roughly $8 billion of suspected money-laundering transactions previously reported by a Danish newspaper could grow higher.
Shares in the bank traded down more than 7% on Friday after the Wall Street Journal reported on the scope of the investigation.
The $150 billion figure, which has been presented to the bank’s board of directors, is a substantial sum considering Estonia’s entire banking system reports total deposits of €17 billion ($19 billion). Even in the context of Russia, the suspected source of some of the funds, the figure would represent more than a year’s worth of the country’s corporate profits. The flows would have stayed in the branch for only a short time before leaving Estonia, according to a person familiar with the investigation, so wouldn’t fully show up in official statistics.
An expanded version of this report appears at WSJ.com.
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