STOCKHOLM (Reuters) - Sweden’s financial watchdog said allegations in a media report linking Swedbank to a Baltic money laundering scandal, involving Danske Bank were “very serious” as shares in the Swedish bank tumbled on Thursday.
Danske is being investigated in five countries over some 200 billion euros ($226 billion) of suspicious payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian branch.
Swedish TV said on Wednesday that documents showed at least 40 billion Swedish crowns ($4.30 billion) had been transferred between accounts at Swedbank and Danske in the Baltics between 2007 and 2015, prompting Estonia to investigate the allegations.
Swedbank shares, having recorded their biggest intraday fall since the financial crisis on Wednesday with an almost 14 percent drop, were down a further 9.2 percent at 165.2 Swedish crowns at 1055 GMT on Thursday.
The stock has now lost more than a fifth of its value in less than two days.
Swedbank is the largest bank in the Baltics with around 3.3 million private customers and around 300,000 corporate customers spread across the three countries.
The Baltics accounted for just under a fifth of Swedbank’s revenue in 2018.
Nordic peers SEB and Handelsbanken were down 2.9 percent and 0.3 percent, while Nordea was down about 2.9 percent.
The Swedish Financial Supervisory Authority (FSA) said that information from the television news report had confirmed the risk that Swedish banks were being used for money laundering, even though the scope of the suspected transactions in Swedbank’s case appeared to be much smaller than those at Danske.
“The disclosures are very serious and will be included in FSAs ongoing and future supervision activities,” FSA Director Erik Thedeen said in a statement on Thursday.
“They will also be discussed with the supervisory authorities in the three Baltic countries in the near future.”
On Wednesday, Swedish Financial Markets Minister Per Bolund had said that the allegations could damage the reputation of the Swedish banking sector.
Bill Browder, founder and CEO of investment fund Hermitage Capital Management told Reuters on Thursday he intends to file a criminal complaint against Swedbank with Swedish authorities, contradicting Swedbank CEO Birgitte Bonnesen’s claim on Wednesday that he had no intention to do so.
“It is my intention to file a criminal complaint against Swedbank,” Browder told Reuters, declining to specify when he would file the complaint.
Analysts have said that one of the biggest risks that Swedbank faces is a potential criminal complaint from Bill Browder, once one of the biggest foreign money managers in Russia who is now campaigning to expose corruption.
Browder has urged various government authorities to bring money laundering cases against Danske.
“We see the prospect of a criminal lawsuit from Bill Browder and any potential U.S. investigation as the price-sensitive issues,” Jefferies analysts said in a client note.
Bonnesen also said she was comfortable with the safeguarding systems that had been in place throughout the years and Swedbank had reported any suspicious transactions it caught, but could not offer assurances that it had not missed any.
Alecta, the third biggest Swedbank shareholder with a stake of just under 5 percent, said on Thursday it had been in contact with Swedbank and had received assurances that Swedbank felt comfortable with how they have acted.
“We follow developments carefully and are in constant contact with Swedbank,” Ramsay Brufer, corporate governance manager at Alecta, said in an e-mailed statement.
Reporting by Esha Vaish and Johan Ahlander in Stockholm; editing by Keith Weir and Jason Neely