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COPENHAGEN – Denmark's largest bank has found more than $ 200 billion worth of transactions in its Estonia branch and suspects that a large part of its transactions were related to money laundering, often from Russia. The CEO resigned as a result of the one year investigation.
Thomas Borgen, CEO of Danske, said: "It is clear that Danske Bank did not live up to its money laundering responsibilities in Estonia," adding that the investigation did not reveal any breach of its legal obligations. Mr Borgen will remain until the appointment of a replacement, the company said.
The magnitude of the scandal weighed on his actions and raised concerns about a bank that holds more than a third of the deposits of customers in the country.
Danske's difficulties began in early 2017 when the lender was involved in a series of money-laundering cases involving its subsidiary in Estonia, a Eurozone country that was now part of the Soviet Union.
On Wednesday, the bank said that about 200 billion euros ($ 233 billion) were transferred through the Estonian unit between 2007 and 2015. A large part of the payments was probably suspect, he said. Investigators looked at 15,000 clients, before focusing on 6,200 people who, in their view, deserved careful scrutiny of the signs of money laundering. Of these 6,200 people, "the vast majority of these clients were deemed suspicious," the report concluded.
"There are suspicions that there have been employees in Estonia who have helped or collaborated with clients," the bank said in a press release.
Danske has been slow to respond to this growing scandal and has launched a thorough investigation only last September. The branch is under investigation by US authorities and Danish and Estonian prosecutors.
The Danish banking supervisor in May reprimanded Danske for weak checks and ordered him to hold an additional $ 800 million in capital. In her decision, she described the repeated inaction of the bank's management. The warnings were softened when they were sent to the board. Despite warnings about problems in its portfolio of non-resident customers in 2013, the bank did not start closing the accounts almost two years later, according to the supervisor.
Danske said on Wednesday that the investigation had revealed that a number of former and current employees, both in Estonia and at headquarters, "had not complied with the legal obligations" of their employment. He reported this to the Estonian authorities, including the police.
Write to Patricia Kowsmann at [email protected] and Drew Hinshaw at [email protected]
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