Swedbank report showed $10 billion 'suspicious' Baltic payments: Swedish TV

15 Mar 2019

Swedbank report showed $10 billion 'suspicious' Baltic payments: Swedish TV

By Esha Vaish and Johannes Hellstrom

STOCKHOLM An internal Swedbank report in September detailed "suspicious" transactions totaling around $10 billion between customers of Swedbank and Danske Bank in the Baltics from 2007 to 2015, Swedish state television SVT reported.

Swedbank said on Friday that the figure reported by SVT was the gross amount of transactions with Denmark's Danske Bank identified in its initial review and that it had acted on any suspicious activity, including reporting customers to police.

SVT said the "Swedbank Compliance" report, which Reuters has not seen, showed that a large number of suspicious clients had moved 3.2 billion euros ($3.6 billion) and $6.7 billion between the two banks, double the number SVT had previously identified.

Several European and overseas banks have been dragged into the Danske Bank scandal, which centers on suspicious transactions of 200 billion euros that originated in Russia and elsewhere and flowed through its Estonia branch in 2007-2015.

"As we have repeated many times, we act on different signals. Therefore, it was natural for us to act when the disclosures about Danske Bank came out on the market," Swedbank CEO Birgitte Bonnesen said in a statement.

"In the analysis last year, we looked at both current and former customers in the Baltic countries... 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," she said.

Swedbank shares, which have lost over 16 percent since an SVT report on Feb. 20 tied it to at least 40 billion Swedish crowns ($4.3 billion) of suspicious transactions with Danske Bank, were down 1.1 percent at 174.15 Swedish crowns.

"For more meaningful details we'll need to wait for the findings of the FRA report pre-AGM and to see the scope of the Swedish FSA review," said KBW analysts, who have a "market perform" rating and 200 Swedish crowns target price on Swedbank.

SUSPICIONS REPORTED

Swedbank, which faces a joint probe by the Swedish and Estonian financial watchdogs, is under pressure from some of its biggest shareholders to reveal more about what it knew about the allegations. The bank hired external auditors FRA to look into the original SVT report after investor demands.

"We assume that the internal report that Swedbank produced in the autumn of 2018 is included in the Swedish FSA's documentation and in the review that FRA is now conducting," said Ramsay Brufer, head of corporate governance at Alecta, which is the bank's third largest investor.

Swedbank said it had shared its internal report, which covered an in-depth analysis of about 2,000 customers throughout the Baltic countries, with the Swedish watchdog.

The bank, which has 900,000 private and 130,000 corporate customers in Estonia, also said that based on last year's transactions flagged by its anti-money laundering systems, it had made four notifications per day to Estonia's finance police.

Swedbank and Sweden's financial watchdog did not respond to requests for comment, while the Estonian watchdog and Danske Bank both declined to comment.

Swedbank has declined to comment on the data in the original SVT report or a criminal complaint by Bill Browder, an investor who campaigns to expose corruption, saying it cannot comment on details due to Swedish banking secrecy laws.

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