COPENHAGEN – Danske Bank said on Thursday it faced a potentially “material” fine over one of the world’s biggest money laundering scandals revealed in 2017 and would consequently not pay a dividend for the first quarter.
Denmark’s biggest lender is under investigation by authorities in the United States, Denmark, France and Estonia over 200 billion euros ($209.70 billion) of payments that were funnelled through its now closed Estonian branch between 2007 and 2015.
The revelation of Danske’s involvement in the money laundering scandal led to police charges against the bank as well as the exit of Danske’s then chief executive, Thomas Borgen.
“Danske Bank is now in initial discussions with U.S. and Danish authorities on resolution of the Estonia matter,” the bank said, adding that it was not yet able to reliably estimate the timing or size of a potential fine or settlement.
Such a fine was likely to be “material”, it added.
Danske said in February it would pay out dividends in tranches this year in order to ensure a “prudent capital management in light of the Estonia matter.”
Shares in Danske initially fell after the announcement but traded up 1.43% by 1250 GMT.
“That is probably due to the prospect of this case soon becoming a thing of the past,” said Nordnet analyst Per Hansen, who said a potential fine could be between “several billions” and up to 10 billion Danish crowns ($1.41 billion).
($1 = 7.0893 Danish crowns)
($1 = 0.9537 euros)