Monday, October 26, 2020

SEB to feature in Swedish TV money laundering programme, shares tumble amid concerns


A planned Swedish TV programme on suspected money laundering in the Baltics will include information on Sweden’s SEB, the bank said on Friday, sending its shares down almost 13%.

SEB has received questions from the public service broadcaster’s investigative news programme “Uppdrag Granskning” but has no further knowledge on the content of the programme, the bank said in a statement.

It will evaluate any information shown in the programme and compare with its own analyses and previously handled cases, it added.

The news risks dragging SEB into a money laundering scandal it has so far managed to avoid but which has hammered the shares of Nordic rivals Danske Bank and Swedbank and rocked the wider banking sector in the region.

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“We haven’t received that much information yet, but they have said they will do a programme on suspected money laundering in the Baltics and in that context they have information regarding SEB,” SEB spokesman Frank Hojem said.

SEB shares were down almost 13% at 1225 GMT. The stock had gained 7.8% this year prior to Friday’s session.

“There have been some really gloomy stories on both Swedbank and Danske Bank in the past year so people are fearing something similar for SEB,” Kepler Cheuvreux analyst Robin Rane said of the programme, which is scheduled to be broadcast on Nov. 20.

Danske Bank, Denmark’s biggest bank, is under investigation in several countries over 200 billion euros ($220 billion) of suspicious payments moved through its Estonian branch between 2007 and 2015 that have put it at the centre of one of the largest money laundering scandals in history.

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The bank, whose shares have more than halved in the past 18 months, was forced in October to withdraw from Estonia entirely by the local regulator.

Swedbank has also lost around 40% of its market value since allegations surfaced that its Estonian branch processed suspect gross transactions of up to 20 billion euros a year from mostly Russian non-residents between 2010 and 2016.

SEB and Swedbank have a larger presence in the Baltics than Danske Bank had, focusing on traditional banking activities such as deposit taking and lending services.

Business in Estonia accounted for 5% of SEB’s operating profit last year, according to its 2018 annual report. SEB is the second biggest bank in Estonia, behind Swedbank, in terms of market share in banking services such as deposits and lending.

“We have confidence in how SEB works and with how it is dealing with these issues,” said Viveka Hirdman-Ryrberg, head of corporate communications at Investor, SEB’s largest shareholder.

Investor owns a 20% stake in SEB and is itself controlled by the prominent Swedish Wallenberg family who founded SEB in 1856.

Shares in the investment company fell 1% in morning trading, having risen 35% this year.

In April, SEB CEO Johan Torgeby said he was “comfortable” with how the bank had conducted itself in the past but that there were no guarantees.

“If new information emerges that has previously not been known to SEB, SEB will take action immediately,” the bank said.

SEB said in October Latvia’s financial regulator was conducting an anti-money-laundering review of its operations there. The Latvian watchdog told Reuters on Friday the review was “an inspection and not an investigation.”

Sweden’s financial supervisory authority declined to comment on the news programme. Financial watchdogs in Estonia and Lithuania have not responded to requests for comment.


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