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ABN Amro plunges on news Dutch bank faces money laundering probe
[AMSTERDAM] ABN Amro Bank NV fell the most in more than three years in Amsterdam trading after Dutch authorities opened a criminal investigation into the bank under anti-money laundering laws.
The bank failed to report suspicious transactions and didn't conduct sufficient checks on its clients, according to the prosecutor's office. The investigation started in response to a notification from the Dutch central bank, it said. ABN Amro said separately that it faces an investigation under the Dutch anti-money laundering and terrorist-financing law, without providing further detail.
ABN Amro dropped as much as 9.6 per cent in Amsterdam trading and was down 8.8 per cent at 16.49 euros as of 9:05am.
The investigation comes after ING Groep, the largest Dutch bank, last year paid 775 million euros (S$1.17 billion) to settle an investigation by the prosecutor after acknowledging "serious shortcomings" in customer due diligence to prevent financial crime. The central bank responded by saying that Dutch banks in general aren't making enough effort to fulfill their role as gatekeepers of the financial system.
ABN Amro said in July said that it needs to review all of its five million retail clients after receiving a warning from the Dutch central bank. ABN Amro took a 114 million-euro provision for the checks in the second quarter, after already setting aside 85 million euros at the end of last year for stepping up financial crime prevention in commercial banking and the credit card business.
The bank said at the time that sanctions may be imposed by the authorities but said it hasn't made a provision for a possible fine as the "amount cannot be estimated at this time."
Following the ING fine and the central bank's criticism, the largest Dutch banks have been stepping up compliance spending, including adding more staff to its crime prevention teams. Earlier this month, five of the country's largest lenders said they are exploring a system to jointly monitor transactions in the fight against money laundering after the government pledged to clear legal hurdles that might prevent them from doing so.