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”.
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.
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.
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.
Swedbank CEO Birgitte Bonnesen told analysts late on Wednesday that Browder had told her that he would not be filing a lawsuit. Browder, however, was quoted by Bloomberg shortly after as saying that he could not rule out making a formal complaint against Swedbank.
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.
Reporting by Esha Vaish and Johan Ahlander in Stockholm; Editing by Emelia Sithole-Matarise and Keith Weir