2 Feb, 2022

Swedbank names 4 US authorities investigating Baltic money-laundering scandal

Swedbank AB (publ) named for the first time the four U.S. authorities that are investigating the bank's role in a money-laundering scandal at its Baltic business.

The Department of Justice, the Securities and Exchange Commission, the Office of Foreign Assets Control and the Department of Financial Services in New York are conducting investigations in relation to Swedbank's historical anti-money-laundering and counter-terrorist financing work and information disclosures, the Swedish lender said Feb. 2 in its fourth-quarter results.

Swedbank previously disclosed that multiple U.S. authorities were carrying out probes but the lender did not name them for legal reasons, spokeswoman Unni Jerndal had told Reuters.

"The U.S. investigations are ongoing," CEO Jens Henriksson said on an earnings call. "They are in different phases and we can still not estimate any potential fines or when the investigations will be concluded."

The bank expects AML-related investigation costs to rise to 500 million kronor in 2022, from about 350 million kronor in 2021, CFO Anders Karlsson said on the call.

"This is our best estimate, but we are not in the driver's seat," Karlsson said, adding that the final cost will depend on how the U.S. investigations develop.

Swedbank was found in 2020 to have processed high-risk payment transactions of roughly €37 billion between 2014 and 2019 through its Baltics operations, according to an investigation by law firm Clifford Chance commissioned by the bank. The probe furthermore found that transactions totaling approximately $4.8 million may constitute a potential breach of U.S. sanctions.

Swedbank received a 4 billion kronor fine from Sweden's financial regulator in March 2020 for "serious deficiencies in its measures to combat money laundering" in its Baltic operations. Henriksson acknowledged then the shortcomings observed by the regulator, saying they would be "managed and remedied without delay."

As of Feb. 1, US$1 was equivalent to 9.28 Swedish kronor.