The money laundering scandal of Danske Banks Estonian operation was one of the global top stories in 2018, and it’s not over yet.

Between 2007 and 2015 some 200 billion euros ($227 billion) in payments flowed through the non-resident portfolio of Danske Bank’s tiny Estonian branch. So far this have led to 40% drop in Danske Banks share price since the scandal was relived, Thomas Borgen then CEO have stepped down and the bank have been instructed by Denmark’s financial regulator to raise its capital requirements by 10 billion Danish crowns ($1.5 billion) due to increased compliance and reputational risks. In May, the regulator imposed eight orders for reforms and eight reprimands. For now, Danske Banks shareholders awaits the U.S investigation as U.S. fines tend to be much larger than those in Denmark, Estonia and Europe in general. The worst-case scenario is if the bank would lose access to dollar funding, which could be a punishment by the U.S. authorities.  More info found here.

But Danske Bank is not alone ant the story is not over here.

On the 20th of February, Swedbank were dragged into the same scandal when Swedish journalists revealed that Swedbank could be linked to the same money laundry case. It was reported that at least 40 billion SEK ($4.30 billion), had been transferred between Swedbank and Danske accounts in the Baltics between 2007 and 2015. Swedbank’s CEO, Birgitte Bonnesen had previously explained how Swedbank was not involved in any type of money laundering scandal in the Baltics. Within just two days from the news that Swedbank was in fact involved in the money laundering its share price lost 20%.

Swedbank is the largest bank in the Baltics with around 3.3 million private customers and around 300,000 corporate customers spread across the region. The Baltics accounted for just under a fifth of Swedbank’s revenue in 2018.



On the 4th of March Nordea (the largest of all Nordic banks) was included in the scandal as well when it was revealed by Finnish TV that Nordea had also been linked to suspicious transactions between 2005 and 2017. This money however originated from companies registered in tax havens such as the British Virgin Islands, Panama or Belize. News that the market took with some ease.

Bill Browder, a US-born investor who a few years ago was the largest foreign investor in Russia, and today is a prominent critic of president Vladimir Putin, has earlier filed criminal complaints against Nordea in all four of the main Nordic countries, accusing the bank of handling hundreds of millions of euros of suspect funds. Funds which Bill Browder says are linked to the Magnitsky scandal. Several of the countries’ prosecutors are examining the claims, although Swedish authorities have declined to investigate. On the 7th of March it became known that he filed criminal complaints against Swedbank as well. More info found here.

“It´s been a really tough day”

On the 27th of March Swedbank’s share price fell another 12% during what, CEO, Birgitte Bonnesen referred to as “a really tough day”. The significant drop in Swedbank’s share price was due to a raid at Swedbank´s HQ by the Swedish Economic Crime Authority, who investigating the bank for aggravated fraud as well as a previous probe into whether they broken insider information rules. Together with the news that Swedbank might have withheld The New York State Department of Financial Services on information regarding money transfers from the Baltics to Panama. The information lead US regulators to launched multiple inquiries into the rapidly expanding money-laundering scandal at Swedbank, demanding more information on the Swedish bank’s conduct amid new allegations that it handled €135bn from high-risk clients. More info found here.

Nordic banks, once seen as safe-havens following the global financial crisis, are coming under growing pressure both from their business in the neighboring Baltic countries, where many of them expanded in the early 2000s, and increasingly from their domestic units. The question however is how much more of this money laundering scandal is there to be found, and what other banks might be involved. Swedbank is a systemically important bank for the Baltic region and therefor too big to fail. The risk of US sanctions has likely skyrocketed if the information that the bank have withheld information from The New York State Department of Financial Services turn out to be true.



Compared to their European counterparts, Nordic banks are still well managed, and in many ways, a preferred investment. In contrast, the German banks are still hurt from the financial crisis in 2008, and among the southern European banks many are left in a bad shape from the Euro-crises in 2011.

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