Swedbank admits anti-money laundering failings, cooperating with US authorities

STOCKHOLM: Swedbank admitted to previous shortcomings in combating money laundering on Thursday and said it was cooperating with investigating authorities, including in the United States. The Swedish bank, whose CEO and chairman have both left since money laundering allegations against it first surfaced in February, is the subject of a joint probe by financial watchdogs in Sweden and the Baltics.
Broadcaster SVT has reported that the bank processed gross transactions worth up to 20 billion euros ($22.3 billion) a year from high-risk, non-resident clients, mostly Russian, through its Estonian branch from 2010 to 2016. Despite the publicity around the money laundering allegations, Swedbank’s first-quarter operating profit rose to 6.63 billion Swedish crowns ($703 million) and beat the 6.09 billion expected in a poll of analysts.
“Previous internal investigations have indicated shortcomings in Swedbank’s anti-money laundering work,” acting CEO Anders Karlsson told reporters.
Shortcomings included reports that certain customers matched against previously known money-laundering cases not being flagged, weaknesses in know-your-customer procedures as well as the absence of investigations and reports to the authorities on certain suspicious transactions, Karlsson added.
Karlsson, who was named acting CEO after former head Birgitte Bonnesen was ousted just hours ahead of the annual general meeting last month, said he could not elabourate on the US investigations for legal reasons.
“US authorities are interested and are asking us questions,” he said.
Involvement by US authorities, while expected given the allegations, has been a key concern among investors as sanctions against the bank could dwarf those of local watchdogs and even put Swedbank’s ability to transact in the US dollar at risk.
Swedbank said an in-depth investigation, led by law firm Clifford Chance, was underway to review its current and historic customer relationships through its Baltic subsidiaries, the bank’s response to previous internal reviews and its anti-money-laundering compliance processes. — Reuters