Danske Bank value plummets in midst of money laundering scandal

Following a depreciation in share price on Tuesday, Danske Bank, Denmark’s biggest lender, has now seen its market value fall by 100 billion kroner since the beginning of the year.

Danske Bank value plummets in midst of money laundering scandal
File photo: Mads Claus Rasmussen/Ritzau Scanpix

During 2018, the bank has faced reports of possible money laundering related to more than 200 billion euros transferred through its Estonian branch.

Former CEO Thomas F. Borgen has since left his position with the bank.

On Tuesday morning, shares in the bank fell by 1.5 percent to 128.50 kroner, making Danske Bank 101.3 billion kroner — equivalent to 47 percent — less valuable since the beginning of the year.

The bank’s total value on the stock exchange as of Tuesday morning was 115.1 billion kroner.

Following an internally-commissioned investigation, it said last month that it said “a large part” of transactions totalling 200 billion euros at its Estonian branch between 2007 and 2015 were “suspicious”.

Authorities in Estonia, Denmark, the United Kingdom and the United States are all looking into the irregularities, and the European Commission has also called for a probe.

The current pressure on the bank’s share price is related to potentially large fines for lack of regulation or potential illegalities at the Estonian branch, Ritzau writes.

READ ALSO: What you need to know about Danske Bank's mushrooming money laundering scandal


Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal