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Swedbank third-quarter profit squeezed by costs for money-laundering fall-out

Swedbank third-quarter profit squeezed by costs for money-laundering fall-out
A Swedbank branch located in downtown Stockholm is seen September 30, 2008. REUTERS/Bob Strong/File Photo -
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Bob Strong(Reuters)
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STOCKHOLM (Reuters) – Swedish bank Swedbank <SWEDa.ST> reported a bigger-than-expected fall in third-quarter earnings on Wednesday as the costs to handle the fall-out of a money-laundering scandal in its Baltic business weighed.

Net profit fell to 4.66 billion Swedish crowns ($482 million) compared to 5.53 billion crowns in the third quarter of last year and falling short of the mean forecast of 4.81 billion crowns in a Refinitiv poll of analysts.

“We have spent more to manage the ongoing government investigations and to take measures to strengthen our AML processes,” newly appointed Chief Executive Officer Jens Henriksson said in the report, referring to anti-money laundering (AML).

Sweden’s oldest retail bank earlier this year dismissed its CEO and accepted the resignation of its chairman after its Estonian business was caught up in money-laundering allegations that have also engulfed Danish peer Danske Bank <DANSKE.CO>.

Swedbank is the subject of a joint investigation by the Swedish and Baltic financial watchdogs and is also being investigated by at least two entities in the United States.

The lender has lost around 40% of its market value since the scandal became public.

Net interest income, which includes income from mortgages, rose to 6.55 billion crowns from 6.33 billion crowns a year ago and just below 6.60 billion crowns in a Reuters poll of analysts.

($1 = 9.6659 Swedish crowns)

(Reporting by Johan Ahlander; Editing Niklas Pollard and Christian Schmollinger)

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