Analytics, Banks, EU – Baltic States, Financial Services
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Wednesday, 24.04.2024, 20:33
Estonian Krediidipank: Number of dollar clearing service providers to fall in coming years
Although recently Germany's leading bank, Deutsche Bank, stopped providing
correspondent banking services to Estonian and Latvian banks and cut off access
to dollar clearing facilities for them, this decision does not concern Krediidipank anymore. "Our
cooperation with Deutsche Bank ended
already last fall and thereafter we have used other mediators," told head
of business customer banking at Krediidipank
Hans Pajoma.
According to Pajoma the number of banks that provide dollar
clearing services will probably fall in the coming years. "This not only
concerns Baltic countries, but is a global trend, as a result of which it will
be more difficult for smaller banks to find cooperation partners to mediate
dollar payments," he said.
An international group of investigative journalists at the
end of March published their findings on how banks laundered 20.8 bln U.S.
dollars of Russian money of allegedly illicit origin, of this nearly 1.6 bln
dollars through Estonia. A document leaked to the Organized Crime and
Corruption Reporting Project (OCCRP) team lists tens of thousands of companies
and reveals how Estonian accounts of little-known offshore companies were used
to move sums that equal a sixth of country's state budget. The lion's
share, 1.18 bln U.S. dollars, of the funds moved through Estonia were
transferred via accounts at the Estonian branch of Danske bank.
Danske Bank at the
beginning of 2015 informed the public of its decision to restructure its
commercial activities in the Baltic states and to focus on servicing corporate
and private banking clients. It said that starting from June 1 that year, Danske Bank will only enter into new
credit agreements with companies and private banking clients.
Making U.S. dollar payments in Estonia and Latvia may become
extremely difficult if Deutsche Bank
should stop handling dollar settlements here, Aivar Paul, head of prevention of money laundering at LHV Pank, said then. "It will
definitely not happen at the same price, it will definitely not happen as
quickly, and I'm not ruling out that it will not be possible to conduct all
transactions then," he added.
Deutsche Bank last
year posted EUR 1.4 bln in loss, and this has been the second consecutive year
the bank sustained loss. Recently also large fines had been slapped on the
bank, for example, in January New York's and British authorities imposed a fine
of 630 mln dollars on the bank for inability to prevent money laundering in
Russia.
According to risk manager of Eesti Meedia, Erki Haamer,
who previously worked as risk manager of Baltic banking at the Finnish OP bank, told on Monday that Deutsche
Bank leaving the market should not have a big impact on bigger banks because
they can always use their parent banks as correspondents and their contra
correspondents.