Danske Bank Estimates Money Laundering Fines at €2.08b

Danske Bank predicts in its third-quarter report that the United States and Danish governments could fine the bank €2.08 billion for money laundering in Estonia.

Danske Bank estimates in its third-quarter review that the solution agreed upon with the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and the Danish National Special Crime Unit (NSK) is expected to cost €2.08 billion.

The bank previously estimated the potential fine at €200 million. However, Danske Bank said that negotiations with the authorities are still ongoing and it remains uncertain whether a deal could be reached soon. The bank anticipates a resolution by the end of the year, but the pace of the process is beyond its control.

The bank made a provision in the third quarter to cover the potential fine, adding another €1.88 billion to the €200 million provision made in 2018, bringing the third-quarter loss to €2.3 billion.

The Estonian branch of Danske Bank was used for money laundering: between 2007 and 2015, an estimated €200 billion of dirty money flowed through the Estonian branch, servicing Estonian non-residents. The bank started to reduce the number of non-residents it served in 2014, following an inspection by the Estonian Financial Supervision and Resolution Authority (Finantsinspektsioon), but it did not close down.

The outbreak of the scandal damaged the reputations of the bank, Estonia and Denmark, and hampered the operations of local financial institutions. The Financial Supervision Authority shut down the Danske branch in Estonia because of money laundering.

Article Credit : https://news.err.ee/1608767881/danske-bank-estimates-money-laundering-fines-at-2-08-billion