UniCredit SpA is being investigated by Croatia’s central bank over suspicious transactions made by clients of the Italian bank’s unit in the Balkan country, according to people with knowledge of the matter.
A probe of Zagrebacka Banka d.d. examined multiple movements of money that fell just below the value that triggers detailed disclosure requirements, the people said, asking not to be identified because the matter is private. The investigation, which can trigger fines, seeks to determine whether lender had the proper processes and internal controls to identify or prevent money laundering by its clients, according to the people.
Zagrebacka, known as Zaba, is one of five big banks being evaluated by the European Central Bank as part of Croatia’s efforts to join the euro area’s waiting room, known as ERM-2. While the ECB is looking into the banks’ capital adequacy and ability to handle macroeconomic risk, other areas such as money-laundering aren’t included in the assessment, the central bank said in response to Bloomberg questions.
UniCredit CEO Jean Pierre Mustier reshuffled management and implemented stricter controls at the unit after the first evidence from the probe emerged at the end of last year, according to the people. Zaba has recently boosted training and introduced other measures to implement stricter procedures to comply with the rules and UniCredit is fully cooperating with authorities, they said.
A spokesman for UniCredit in Milan and a representative for Zagrebacka Banka declined to comment. The Croatian central bank also wouldn’t comment, saying the supervision process is private. It would only make a public statement if an investigation results in a fine or other penalties, the regulator said by email.
By keeping individual transactions below a certain size, a bank client can move large amounts of money without having to disclose as much information as they would for a bigger action.
While banks are obliged by law to analyze thoroughly every transaction of 105,000 kuna ($15,655), or more, they are also required to monitor “all transactions that are complex, unusual, and without an obvious economic or legal purpose,” the central bank said.