Danske Bank to forgo Estonian money laundering profits ({{commentsTotal}})

Danske Bank's Estonian branch was used to launder money.
Danske Bank's Estonian branch was used to launder money. Source: Reuters/Scanpix

Danske Bank said on Wednesday that it would forgo profits made on suspicious transactions in Estonia once the scale of the past money laundering scandal becomes clear, Reuters reported.

Danske said in its report on the first half of 2018 that the investigations into the issues related to the now closed down non-resident portfolio at Danske's Estonian branch between 2007 and 2015 continue to progress according to plan.

The investigations are comprehensive, covering a period of nine years and a large quantity of data, including more than 9 million emails, 7,000 documents and millions of transactions.

The board of directors and the executive board are determined that Danske Bank should not benefit financially from such suspicious transactions in the Estonian non-resident portfolio, it said.

"Consequently, it is Danske Bank's intention to make the gross income generated from such transactions in the period from 2007 to 2015 available for efforts that support the interest of the societies in which we operate, such as combating international financial crime," the bank explained. "As the comprehensive investigations, which are anchored in the board of directors, have not been finalized, it is too early to determine the amount to be made available."

For reference, the bank noted, the total gross income from the non-resident portfolio between 2007-2015 has been estimated at around DKK 1.5 billion, or over €201 million. "Conclusions from the investigations will be reported by September 2018," Danske said in its interim report. "The amount and the way in which it will be made available will be decided after we have concluded investigations."

The bank has launched its own investigation into the case, which it said dated back to 2007-2015, after a newspaper report this month said Danske laundered up to $8.3 billion in US dollars — more than twice the amount previously reported. It is due to present its findings in September.

Danish Minister for Industry, Business and Financial Affairs Rasmus Jarlov said on Wednesday, however, that Danske could still face legal action despite its decision to forfeit profits from the transactions in Estonia that are subject to a money laundering probe.

"The sin is not erased because they now acknowledge that they can't keep the money," Jarlov told Reuters in an interview. "Whatever legal options there might be for the Danish authorities, they will pursue them."

Danske on Wednesday posted a fall in second-quarter pre-tax profits which missed forecasts, adding that its net profit for the year would be at the lower end of its forecast range.

Pre-tax profit at Denmark's biggest lender stood at 5.49 billion DKK (€736.8 million) for the three months through 30 June, down from 6.18 billion (€829.1 million) a year earlier. Analysts had forecast a profit of 6.02 billion (€807.6 million).

The bank said it still expects a net profit for the year of between 18-20 billion DKK (€2.4-2.7 billion), but that it would likely be at the lower end of that range due to weaker trading income.

On Wednesday evening, Danske shares were down 8.7% on the Copenhagen Stock Exchange at 178 kroner. Since March, the share has lost lost about 25% of its value.

Editor: Aili Vahtla

Source: BNS



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