Tuesday, July 27

Swedbank admits to shortcomings in anti-money laundering steps

STOCKHOLM (Reuters) – Swedbank posted an estimate-beating first-quarter profit on Thursday, but the Swedish bank admitted to previous shortcomings in combating money laundering and said it was cooperating with investigating authorities.

FILE PHOTO: A woman walks past a Swedbank branch in Riga October 21, 2014. REUTERS/Ints Kalnins

The lender is the subject of a joint investigation by financial watchdogs in Sweden and the Baltics, and the bank also confirmed that it was being probed by U.S. authorities.

Broadcaster SVT has reported that the bank processed gross transactions worth up to 20 billion euros ($22.31 billion) a year from high-risk, non-resident clients, mostly Russian, through its Estonian branch from 2010 to 2016.

Swedbank also failed to report suspicious transactions and activities, the report said.

“Previous internal investigations have indicated shortcomings in Swedbank’s anti-money laundering work,” Acting CEO Anders Karlsson said in a statement.

Shortcomings included reports that certain customers matched against previously known money-laundering cases not being flagged, weaknesses in know-your-customer procedures as well as the absence of investigations and reports to the authorities on certain suspicious transactions, Karlsson added.

Swedbank said an in depth investigation, led by law firm Clifford Chance, was now underway to review its current and historic customer relationships through its Baltic subsidiaries, the bank’s response to previous internal reviews and its anti-money-laundering compliance processes.

The lender also said it would set up a new unit called ‘Anti-Financial Crime’ to combat all areas of financial crime, including anti-money laundering.

Allegations against Swedbank, largely reported by Swedish TV, have linked it to a scandal at Danske Bank, which faces potential lawsuits, fines and sanctions after admitting last year that 200 billion euros of suspicious payments had flowed through its Estonian branch between 2007 and 2015.

Swedbank’s operating profit rose to 6.63 billion Swedish crowns ($703 million) from 6.39 billion a year earlier. Analysts on average were expecting operating earnings of 6.09 billion, according to a poll.

Reporting by Johan Ahlander and Esha Vaish; Editing by Niklas Pollard and Sherry Jacob-Phillips

Our Standards:The Thomson Reuters Trust Principles.


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