Nordea shares hit as bank faces money laundering claims

FILE PHOTO: The Nordea Bank AB logo is seen at the SIBOS banking and financial conference in Toronto
FILE PHOTO: The Nordea Bank AB logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren

March 4, 2019

By Anne Kauranen

HELSINKI (Reuters) – Shares in Nordea, the Nordic region’s biggest bank, tumbled on Monday after Finnish public broadcaster Yle announced it would air a program later in the day containing allegations of money-laundering through the bank.

Yle said a large data leak showed that hundreds of millions of euros from suspicious sources had moved through Nordea, without giving any specific details.

Nordea shares fell almost 7 percent on Monday before recovering some of their losses to trade down 3.7 percent at 1115 GMT. The bank was one of the worst performing stocks of the European STXE 600 index, which was up 0.3 percent.

The bank’s Nordic peers Swedbank and Danske Bank have both faced allegations relating to a money-laundering scandal in the Baltic nation of Estonia.

The TV program will be made available online at 1500 GMT. Danish newspaper Berlingske, which has worked with Yle on the subject, will also publish a report on its website.

Nordea said it was aware of the upcoming report and has been in dialogue with both Yle and Berlingske.

“We have not yet seen the program or article,” it said in a statement.

“Based on what we have been invited to comment on, these are all issues that we have seen and commented on before and are therefore in line with previous statements made on AML (anti money laundering) issues,”

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Nordea CEO Casper von Koskull is scheduled to be interviewed by Finnish TV after the program, at 1900 GMT, together with Pekka Vasara, the head of money-laundering investigations at the Finnish National Bureau of Investigation.

The Finnish Financial Supervisory Authority could not be immediately reached for comment.

“Another day, another bank, new allegations,” investment bank KBW said in a note to clients. KBW has an Underperform rating on Nordea stock.

Shares in DNB, Norway’s largest bank, were also down on the news of the upcoming media report.

DNB’s operation in Estonia, Latvia and Lithuania, which dates back to 2006, merged in 2017 with Nordea’s business in the region, creating the third-largest Baltic bank under the name Luminor, with assets of 15 billion euros. Last September, Nordea and DNB agreed to sell a 60-percent stake in Luminor to a Blackstone private equity consortium for 1 billion euros ($1.1 billion), and said the deal was expected to close during the first half of 2019.

DNB declined to provide an immediate comment on the fall in its shares. The Norwegian financial regulator was not immediately available to comment.

Nordic financial watchdogs said in October they had received documents from Bill Browder’s Hermitage Capital Management, alleging Nordea had breached its responsibilities under anti-money laundering laws. The bank said it was working closely with authorities and had reported all suspicious transactions.

Danske, Denmark’s largest lender, is being investigated in five countries over some 200 billion euros ($226 billion) of suspicious payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian branch.

Swedbank is under investigation from both Estonian and Swedish regulators after a television report last month alleged that money laundering could have occurred in relation to at least 40 billion Swedish crowns ($4.30 billion) transferred between Baltics accounts at Swedbank and Danske between 2007 and 2015.

(Additional reporting by Johan Ahlander in Stockholm, Terje Solsvik in Oslo, Stine Jacobsen in Copenhagen; Writing by Gwladys Fouche in Oslo; Editing by Jason Neely/Keith Weir)

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