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Swedbank may have handled over 95b kronor in suspect flows

[STOCKHOLM]  Sweden's oldest bank may have handled considerably more in suspicious transactions tied to the Danske Bank money laundering scandal than first reported.

Swedbank, which dominates financial markets in the Baltic region, was allegedly used for about 95 billion kronor (S$13.9 billion) in questionable transactions, according to Sweden's main television broadcaster, SVT, which cited an internal review carried out by the bank last year. The amount is more than double the level of suspicious flows reported by SVT less than a month ago.

It's not the first time that allegations of money laundering against a big Nordic bank have swelled. Danske Bank, which is being investigated by the US Department of Justice and Securities and Exchange Commission, acknowledged last year that much of about US$230 billion that flowed through a tiny Estonian unit was suspicious in origin. That scandal started with reports of just US$200 million in questionable flows.

In a statement to the stock exchange on Friday, Swedbank said it "takes its responsibilities to prevent and detect money laundering very seriously".

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The bank said the numbers mentioned in the SVT report is the total number of all transactions that emerged when Swedbank assessed flows between Danske Bank and Swedbank in 2007-2015 based on a number of risk indicators. The review, initiated by the bank in the wake of the Danske scandal, included some 2,000 customers. Swedbank said it's not a given that all the transactions were suspicious in nature.

"In many cases, there was no need to act further, but in some cases we proceeded with, among other things, reports to the finance police," it said.

"As we have repeated many times, we act on different signals," Swedbank chief executive officer Birgitte Bonnesen said in the statement. "Therefore, it was natural for us to act when the disclosures about Danske Bank came out on the market. That was the background to our analysis."

In October, Ms Bonnesen repeatedly assured the public that there were no indications of any suspicious flows at Swedbank tying the bank to the Danske scandal in Estonia. After SVT in February claimed about 50 customers at Swedbank transferred some 40 billion kronor in suspicious funds between Swedbank and Danske from 2007 to 2015, she was forced to backtrack.

Swedbank has 900,000 private and 130,000 corporate customers in Estonia, where it has a market share of some 50 per cent. On Friday, the bank said that of the millions of transactions Swedbank's Estonian customers made every day last year, it received an average of 80 warning signs daily. After doing in-depth analyses of those transactions, Swedbank made about four notifications per day to the Estonian finance police.

BLOOMBERG