According to the news report by Bloomberg, the Chairman of Danske Bank AS, Ole Anderson, now agrees that the majority of the $234 billion transactions that were funneled through the bank’s tiny branch in Estonia should be treated with suspicion.
Denmark’s biggest bank revealed the total amount of money that flowed through its Estonian branch on Wednesday as part of its attempt to answer how it had been involved in what has turned out to be one of Europe’s biggest money laundering scandals.
This report that the bank published also stated that the Chief Executive Officer of the bank, Thomas Borgen would step down from his post due to this scandal. The bank stated that Borgen, who had been promoted internally to the post of CEO in 2013 will continue at the company until his replacement is found. However, the bank did not give any timelines as to how long it would take to find Borgen’s replacement.
Borgen himself issued a statement that Danske Bank had failed to live up to its responsibility in resolving the money laundering issue in Estonia and that he deeply regretted this.
Chairman Anderson also indicated that he may also be stepping down once this case was resolved.
Anderson, in an interview with Bloomberg, clarified that he was not ruling out anything at this time with regard to the actual size of the “suspicious” transactions. All he stated was that the lead investigator of this case stated that he believed that a large part of the $234 billion worth of transactions emitting from Estonia could be classified as suspicious. However, how much of that amount is suspicious has not been specified.
Denmark has traditionally been a country that has the lowest cases of corruption as well as the highest levels of transparency in the world. However, this case – the biggest of its kind in Europe – has rocked the country.
Based on the number of criminal complaints that have been lodged against Danske, it seems that the bank’s Estonian unit was used to launder around $9.1 billion from 2009 to 2015. Most of the “black money” seems to have come from Russia.
A review of the transactions carried out from the Estonian unit covered 15,000 accounts in the time period between 2007 and 2015. Of these, Danske states that about 6,200 indicate the highest risk and that all these customers have been reported to the authorities.
Investigations in both Estonia and Denmark are ongoing at this time, and the media reported that the United States is also now looking into this case.
Despite publishing this report, Danske is not off the hook. According to analysts as well as investors, there are a lot of questions that the bank has not given any answers to in this report.
Danske stated that at this time, it could not provide all the answers, such as exactly how much in dirty money was laundered. However, the fact that the bank gave an estimate of $234 billion – a number which is 9 times the GDP of Estonia – has raised serious questions about how concerned the Danish bank’s management was about preventing money laundering.
According to Citi Research analysts, this report by Danske does not show ownership about the issue that the market had hoped. On the other hand, analysts at Jeffries also highlighted the fact the Danish company had not referred to any violations of sanctions, which was actually a relief, considering the fact that the US was also now interested in the case.
Danske’s shares fell another 8%, taking the total losses for the year to 32%. The bank’s market value has nosedived by $14 billion since 2017.