Swedbank actively courted high-rolling, non-resident clients
Swedbank, the latest bank in Estonia to be linked with potential money laundering activities, actually actively sought wealthy Russian clients, according to a report by international news agency Bloomberg.
The bank, via its Estonian subsidiary, had also place job postings which stated roles would include helping ''Russian and Commonwealth of Independent States [CIS] customers achieve their goals,'' the report said.
According to investigative SVT program Uppdrag Granskning last week, at least 40 billion Swedish kronor ( around €3.8 billion) moved between Swedbank and the Baltic units of Danske Bank, over around a 10 year period. Danske Estonia has been ordered to close within an eight-month period by the Estonian Financial Supervisory Authority (FSA), following investigations into potentially illicit money flows of up to €200 billion which passed via the branch in 2007-2015.
Activities at Swedbank currently under focus come from roughly the same time-frame as the suspect Danske money flows.
Swedbank share price falls
Swedbank lost $5 billion, around 20%, of its market value since the allegations against it first surfaced, and has seen a fall in it share price of a couple of percent, although the bank has striven to distance itself from the Danske scandal, the Bloomberg piece reports.
In response to various questions on the matter, the bank wishes to "provide the same facts to all external stakeholders at the same time,'' Swedbank spokesman Gabriel Francke Rodau wrote in an email, according to Bloomberg.
''So I do not want to comment on specific details. But note that there is an interest regarding this detail,'' Mr Rodau reportedly went on.
Furthermore, Estonian daily Postimees published an opinion piece by Kilvar Kessler, head of the FSA, who said that "probably a majority of universal banks" doing business in Estonia "were offering services to non-residents in the past."
Swedbank and Danske potentially illicit money flows happened around the same time
Danske not only ceased taking on new non-resident clients in 2015, but also started closing existing accounts, precisely because of suspicions about the origin of the money flows passing through the bank.
Mr Kessler added in the Postimees piece that the FSA "won't be shocked if there will be further details about the past that now embarrasses the banks."
Swedbank's international private banking department began activities in 2006, when the bank was still called Hansabank, changing its name to Swedbank in 2009.
Bloomberg cited an unnamed source who said that the private banking unit was focussed on non-resident customers, to a certain extent even after reorganisation in 2009.
Former Danske clients switched to Swedbank
Moreover, the same source told Bloomberg that at least 75% of non-resident account holders switched to Swedbank from Danske after the latter started closing non-resident accounts in 2015
Swedbank is now being investigated by the financial supervisory authorities of Sweden and Estonia.
Not all money flows via non-resident accounts are necessarily illicit, Bloomber points out, going on to note that Swedbank had nevertheless placed itself in the market as a bank focussing on local residents.
Swedbank remains one of the largest high street banks in Estonia, with a reported €207 million profit in 2018.
Meanwhile, a draft European Parliament report has said potentially illicit funds originating in the Russian Federation and other CIS countries undermine democracy in the region and necessitate the formation of new financial policing units, according to the Bloomberg piece.
Editor: Andrew Whyte