Danske Bank scandal: Swedbank shares collapse because of money laundering allegations

Because of money laundering allegations, Swedish Swedbank is coming under increasing pressure from authorities and investors. Financial supervisors in Sweden and Estonia launched joint investigations into the financial institution, the authorities said. Lithuania is also involved in the investigation.

The Swedbank share lost around ten percent in the course of trading. Because of the allegations, the Swedbank papers lost a quarter of their value within two days.

The public broadcaster SVT had reported in the money laundering scandal over the Danske Bank also suspected transactions were found at Swedbank. The Swedish pension fund AMF - one of the largest shareholders of the institute - demanded an independent investigation.

Financial supervision takes allegations "very seriously"

Swedbank then commissioned the auditing and consulting firm EY. The allegations made in the TV report are "very serious", said the head of Swedish financial supervision, Erik Thedeen.

Swedbank is the largest money house in the Baltic States and generates almost a fifth of the income in Estonia, Latvia and Lithuania. It has a total of 3.3 million residential customers and 300,000 corporate customers in the three countries.

At the center of the money laundering scandal is the branch of Danske Bank in Estonia. An internal investigation by the institute revealed that most of the 200 billion euros spent on the local branch between 2007 and 2015 were suspect. The money came, inter alia, from Russia and other former republics of the former Soviet Union.

Swedbank Board of Directors strengthens its CEO

The Swedbank board of directors stood behind CEO Birgitte Bonnesen. It has full confidence that Bonnesen and the Board of Directors would focus on solving this issue, said Chairman Lars Idermark.

Bonnesen had repeatedly stated in the past that internal investigations had found no links to the money-laundering scandal at Danske Bank. Back on Wednesday evening, she said she was confident that the money laundering facility would work. But she can not rule out that suspicious transactions were overlooked.

Above all, investors are afraid that, as was the case with Danske Bank, the US authorities could intervene in the investigation and that high demands from the USA could then be assigned to the institute.