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Nordea (NDAFI.HE) posted a larger than expected drop in third-quarter profit on Wednesday, citing pressure on margins, as the company hit back at allegations of lax controls, saying it had spent years beefing up anti-money laundering resources. On Monday, American-born businessman Bill Browder widened a criminal complaint against the bank for facilitating suspicious money transfers worth $400 million out of the Baltics between 2007 and 2013. Nordea is the second Nordic bank to face such allegations, after Danske Bank (DANSKE.CO) came under investigation for suspicious payments totalling 200 billion euros (176.62 billion pounds) from 2007 onwards through its Estonian branch.
Finland's National Bureau of Investigation (NBI) has been sent information on Nordea Bank from Hermitage Capital Management, a spokesman for the Nordic bank confirmed on Monday. Hermitage last week lodged money laundering accusations against Nordea with Sweden's Economic Crime Authority, sending the bank's shares down 2.7 percent on Wednesday. The NBI said in a Twitter post on Monday that it had received a report from Hermitage but declined to provide further detail.
Nordea became the latest large Nordic bank to be accused of alleged money laundering scandals on Tuesday, when Browder's Hermitage Capital Management asked Swedish and Norwegian authorities to investigate as much as $175 million of potentially illicit funds. In an emailed statement to CNBC, Nordea said it was aware of the documents purporting to show it had breached money laundering laws. Scandinavian countries have created a "permissive environment" for money laundering, Bill Browder told CNBC Wednesday, shortly after the prominent Kremlin critic accused Nordea Bank NDA-SE of fraud, falsification and dishonest conduct.
Sweden's Economic Crime Authority said on Tuesday it had received documents from Hermitage Capital Management purporting to show that Nordic bank Nordea had breached its responsibilities under anti-money laundering laws. "We have received documents from Hermitage regarding money-laundering and we're evaluating which authority should handle this," a spokesman for the body told Reuters. Nordea said in an emailed statement to Reuters that it was aware of the report.
Nordic banking group Nordea (NDAFI.HE) (NDA.ST) said on Tuesday it was aware of an allegation by Hermitage Capital Management that it had breached anti money-laundering regulations and said that it reported all suspicious transactions to authorities. "We are aware of the report, and at Nordea we work closely with the relevant authorities in the countries in which we operate, including the Nordic Financial Intelligence Units," Nordea said in an emailed statement to Reuters.
Moody's Investors Service has today assigned an a3 Baseline Credit Assessment (BCA) and Adjusted BCA, a Aa2(cr)/P-1 (cr) Counterparty Risk Assessment (CRA) and a Aa2/P-1 Counterparty Risk Rating (CRR) to Nordea Bank's new legal entity Nordea Bank Abp. Moody's has also assigned Aa3/P-1 deposit ratings, and (P)P-1 commercial paper to Nordea Bank Abp. Today's rating action was prompted by the re-domiciliation of Nordea's headquarters to Finland from Sweden, achieved through a cross-border merger between Nordea Bank AB (previous Swedish parent company) and Nordea Bank Abp (new Finnish parent company) where Nordea Bank AB has been dissolved and merged into Nordea Bank Abp.
The new arrival is Nordea Bank Abp, which is moving its headquarters to Helsinki from Stockholm. The bank, whose $670 billion in assets are more than twice Finland’s gross domestic product, has made clear its move was driven by regulatory considerations and a wish to be inside the European banking union. "We’ll be in the core of Europe," Chief Executive Officer Casper von Koskull told reporters at a recent breakfast meeting in Stockholm.
Nordea and DNB have agreed to sell a 60 percent stake in Baltic bank Luminor to a Blackstone private equity consortium for 1 billion euros ($1.16 billion) in cash, the two Nordic banks said on Thursday. Luminor, the third-biggest bank in the Baltic region with assets of 15 billion euros, was formed by the 2016 decision to merge Nordea's and DNB's operations in Estonia, Latvia and Lithuania. "The transaction represents the largest majority stake acquisition of a universal bank by private equity in the last decade globally, and one of the largest M&A transactions in Baltic history," Blackstone said in a statement.
Moody's Investors Service, ("Moody's") has assigned first time ratings to Luminor Bank AS (Estonia) ("Luminor" or "Luminor Estonia"), including long-and short-term foreign- and local--currency deposit ratings of Baa1/P-2, a provisional local currency long-term (P)Baa2 senior MTN rating, and local and foreign currency counterparty risk ratings (CRR) of A3/P-2. Furthermore the bank was assigned a baseline credit assessment (BCA) of ba1, an adjusted BCA of ba1, as well as a counterparty risk assessment of A3(cr)/P-2(cr).
Europe can’t allow itself another money laundering scandal like the one engulfing Denmark’s biggest bank, according to a growing list of regulators, legislators and even bankers now demanding better region-wide controls against such crime. Rasmus Jarlov, the minister in charge of financial legislation in Denmark, says the example of Danske Bank A/S is one from which Europe needs to learn. The lender is now the target of criminal investigations in Denmark and Estonia amid allegations that as much as $9 billion, mostly from Russia, was laundered through its Estonian unit between 2007 and 2015.
Credit quality at Sweden's top banks remained solid in the first quarter as combined net profits rose sharply in the second quarter, says Moody's Investors Service in a report published today. The report, "Nordea, Handelsbanken, SEB, Swedbank: Top Swedish banks' Q2 profit up strongly on one-offs, corporate lending growth," is now available on www.moodys.com. Moody's subscribers can access this report via the link at the end of this press release.
The wealth management unit of Nordea Bank AB will struggle to reach a target of generating as much as 5 percent in net new money this year after a tough first half, according to its head, Snorre Storset. “We have a long-term target of net flows with 4-5 percent growth from the start of the year,” Storset said in an interview in Oslo on Thursday. Much of the lull in demand for Nordea’s wealth management services can be traced back to its Stable Return Fund.