Swedbank May Have Handled Over $10 Billion in Suspect Flows

Mar 15 2019, 6:25 AMMar 15 2019, 8:39 AMMarch 15 2019, 6:25 AMMarch 15 2019, 8:39 AM

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Sweden’s oldest bank may have handled considerably more in suspicious transactions tied to the Danske Bank A/S money laundering scandal than first reported.

Swedbank Remains in Limbo as ’Dirty Money’ Claims Rise: BI React

Swedbank AB, which dominates financial markets in the Baltic region, was allegedly used for about 95 billion kronor ($10.2 billion) in questionable transactions, according to Sweden’s main television broadcaster, SVT, which cited an internal review carried out by the bank last year. The amount is more than double the level of suspicious flows reported by SVT less than a month ago.

It’s not the first time that allegations of money laundering against a big Nordic bank have swelled. Danske Bank, which is being investigated by the U.S. Department of Justice and Securities and Exchange Commission, acknowledged last year that much of about $230 billion that flowed through a tiny Estonian unit was suspicious in origin. That scandal started with reports of just $200 million in questionable flows.

Read More: Dirty Money Allegations Against Swedbank Trigger U.S. Interest

In a statement to the stock exchange on Friday, Swedbank said it “takes its responsibilities to prevent and detect money laundering very seriously.”

The bank said the numbers mentioned in the SVT report is the total number of all transactions that emerged when Swedbank assessed flows between Danske Bank and Swedbank in 2007-2015 based on a number of risk indicators. It then proceeded with a deeper look at some 2,000 customers. Swedbank said it’s not a given that all the transactions in the review, which was initiated by the bank in the wake of the Danske scandal, were suspicious in nature.

"In many cases, there was no need to act further, but in some cases we proceeded with, among other things, reports to the finance police," it said.

“As we have repeated many times, we act on different signals,” Swedbank Chief Executive Officer Birgitte Bonnesen said in the statement. “Therefore, it was natural for us to act when the disclosures about Danske Bank came out on the market. That was the background to our analysis.”

Swedbank shares declined as much as 2.6 percent in Stockholm trading on Friday. The stock is down almost 20 percent since mid-February, when allegations of links to the Danske scandal first surfaced.

In October, Bonnesen repeatedly assured the public that there were no indications of any suspicious flows at Swedbank tying the bank to the Danske scandal in Estonia. After SVT in February claimed about 50 customers at Swedbank transferred some 40 billion kronor in suspicious funds between Swedbank and Danske from 2007 to 2015, she was forced to backtrack.

SVT claims that the internal report that found 95 billion kronor in suspicious flows was sent to Bonnesen in September last year, the month before she claimed there was no link to the Danske scandal.

The bank last month hired Forensic Risk Alliance to conduct an external review into SVT’s initial claims. The result of that investigation is due by March 28, when Swedbank holds its annual general meeting with shareholders.

Swedbank has 900,000 private and 130,000 corporate customers in Estonia, where it has a market share of some 50 percent. On Friday, the bank said that of the millions of transactions Swedbank’s Estonian customers made every day last year, it received an average of 80 warning signs daily. After doing in-depth analyses of those transactions, Swedbank made about four notifications per day to the Estonian finance police.