Monday, October 26, 2020

Danske Bank to pay billions in fines for global money-laundering scandal

-

Danske Bank A/S probably will be fined around 13.5 billion kroner ($2 billion) this year by authorities in Denmark, the U.S. and the U.K. as investigations into Europe’s biggest money laundering scandal draw to a close, according to estimates by Jyske Bank.

Danske has admitted that a large part of 200 billion euros ($223 billion) in transactions at an Estonian unit were suspicious. The Copenhagen-based lender is cooperating with probes by the U.S. Department of Justice and the U.S. Securities and Exchange Commission, among others.

Penalties tied to investigations will drive up Danske’s yearly operating expenses by almost 50% this year, to 42.4 billion kroner, according to estimates by Jyske analyst Anders Vollesen. Costs will probably return in 2021 to more normal levels of around 26 billion kroner.

“Of course the timing and size is subject to great uncertainty,” Vollesen said by email. “We have looked at previous cases to calculate the expected size in each region, among others the Deutsche Bank mirror trading fine imposed by the U.K. FCA in 2017.”

- Advertisement -

Danske shares have taken a beating since it revealed in September 2018 the full dimensions of the laundering. It now trades at a large discount to peers, and Jyske, which recommends buying the stock, says the current price more than incorporates the consequences of the laundering scandal.

Shares are trading now close to Jyske’s 12-month target of 110 kroner, but Vollesen said he won’t be changing it. The target reflects the “huge risk in how the actual fine plays out” and the fact that 2020 will likely be “a muted year” for Danske, he said.

If fines do end up around $2 billion, “that would be a trigger for higher valuations afterward,” Vollesen said. “I am just not ready to bet on that just yet and would also like to see Danske beat expectations on their normal operations during the next quarters.”

- Advertisement -
- Advertisement -

MUST READ

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

Texas AG Ken Paxton fires second whistleblower who accused him of bribery

A second whistleblower has been fired from the Texas attorney general’s office after reporting his boss, Texas Attorney General Ken Paxton, to law enforcement for...

Crown Resorts chairman Helen Coonan admits casino ‘enabled’ money laundering

Crown Resorts chairman Helen Coonan has conceded the casino giant facilitated money laundering at its Melbourne casino, but blamed it on "ineptitude" rather than...

Newark city councilman charged in bribery and kickback scheme

Joseph A. McCallum Jr., a city councilman in Newark's West Ward, has been accused of taking part in a "bribery and kickback" scheme involving...

UK regulators fine Goldman Sachs £97 million over 1MDB scandal

Goldman Sachs International has been fined £96.6m by UK regulators for risk management failures connected to the 1MDB scandal. The Financial Conduct Authority and Prudential...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks