04 July 2018 by lberuti
Until 3 years ago, DANBNK ( Danske Bank A/S ) offered banking services at its Estonian branch to residents of other countries. Those operations have now embroiled the Copenhagen-based lender in the Nordic region’s biggest money laundering scandal. Many of these non-resident clients were from so-called high-risk countries, with weak defences against money laundering, including Russia, Moldova and Azerbaijan. Danske had indications of possible wrong-doing but only began terminating business with non-resident account holders after it got a report in 2013 by a whistle blower. Since May, when DANBNK was reprimanded by its regulator in Copenhagen and ordered to hold an additional 5Bln kroner in regulatory capital -, 5-year CDS referencing the bank’s senior debt moved from 30 to 45bps. It emerged today that customers would have used the Estonian branch between 2007 and 2015 to launder 53Bln Kroner – roughly $8.3Bln -, more than double previous estimates. DANBNK’s CDS was pushed another 7bps wider to 51bps, making it one of the worst performers among financials in an otherwise rather positive session.