Sweden’s financial watchdog on Thursday fined lender SEB (SEBa.ST) 1 billion crowns ($107.11 million) for failures in compliance and governance in relation to anti-money laundering controls in the Baltics.
The scandal, which first ensnared Danske Bank (DANSKE.CO) and has resulted in fines for two of Sweden’s biggest lenders, lifted the lid on money flows through a region that acts as a bridge between non-resident clients – often Russian – and the European Union and the wider world.
The FSA said SEB should have realised that its operations in the Baltics were at high risk of being used for money laundering, especially as it had account holders who fitted the high-risk criteria.
“Despite this, the bank has reacted too late and too little in both identifying the risks and in taking sufficient measures to reduce them,” Financial Supervisory Authority head Erik Thedeen told reporters at a news conference.
The fine – around one third of SEB’s first quarter operating profit – is the second biggest ever imposed by the watchdog.
The bank said it would now analyse the decision.
“We always strive to adhere to current regulations and our high internal standards, and we continuously develop the bank’s abilities to prevent, detect and report suspected money laundering and other types of financial crime,” SEB said in a statement.
“The FSA clearly thinks this is a significantly smaller violation than we saw with Swedbank,” said Andreas Hakansson, a senior analyst at Danske Bank, adding that the bank would not need to increase its compliance budget as much as had been feared.
SEB shares were up 4.40% by 1542 GMT.
Thedéen said Swedbank had kept information from the watchdog and failed to act on repeated warnings, making it a more serious case.
SEB said previously its own investigations found no sign it had been systematically used for money laundering although it could not offer guarantees.