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Denmark Files Charges Against Nordea in Money-Laundering Case - BLOOMBERG
BY , Bloomberg News
Cyclists pass a closed Nordea Bank AB bank branch at night in Copenhagen, Denmark. Photographer: Freya Ingrid Morales/Bloomberg , Bloomberg
(Bloomberg) -- Danish police has indicted Nordea Bank Abp in what its National Special Crime Unit says is the biggest money laundering case in the country to date.
The unit, which launched court proceedings after investigating the lender’s anti-money laundering controls in the 2012 to 2015 period, said that the case relates to transactions of more than 26 billion Danish kroner ($3.8 billion). The Nordic bank, based in Helsinki, said in a statement that it doesn’t agree with the legal assessment concluded by the Danish authorities.
Investigations into Nordea’s alleged violations of money-laundering rules started in 2016, when the Danish Financial Supervisory Authority reported the Nordic bank to the police. In 2019, just before the case was ready for court, police received additional reports about flaws in the bank’s work to check transactions by Russian clients through a branch in Copenhagen, triggering a new round of investigation.
The indictment is the latest fallout from a series of money-laundering revelations that have rocked the Nordic region’s banking sector since 2018, when Danske Bank A/S had to admit that a large portion of $220 billion in non-resident flows that went through the bank’s Estonian unit was suspicious.
“The indictment is the most comprehensive regarding violations of the Money Laundering Act that we have seen in the banking sector in Denmark,” said Nathalie Ghiorzi Elias, head lawyer from the National Special Crime Unit. “In our assessment, Nordea has breached its obligations in several cases.”
In its statement, Nordea said it expects to be fined in Denmark for “weak anti-money laundering processes and procedures in the past.” The bank made a provision of 95 million euros in 2019 for a potential fine as a result of authorities’ investigations, and said Friday the funds set aside are “adequate.”
It’s unclear when the court will hear the case, and Nordea said that “we do not want to speculate at the time-line at this stage, but in our experience court proceedings usually take a long time.”
Andreas Hakansson, an analyst at SEB AB, said the indictment was “in line with expectations” and welcomed that the matter will finally be settled. “We expect that the provision taken earlier will cover any potential fine,” he said.
At Danske Bank, credit research director Sverre Holbek said the case is “serious,” and carries reputational risk, making it slightly credit negative for Nordea. He added, however, that the Nordic bank should have ample capital buffers too absorb any fine, even if it turns out to be higher than expected.
Nordea shares fell as much as 1.5% and traded 1.4% lower at 11.21 euros as of 13:10 a.m. in Helsinki.
--With assistance from Love Liman.
(Adds context, comment from Nordea and credit analyst note from third paragraph.)
