Banks, Estonia, EU – Baltic States, Financial Services

Danske Bank Estonia Branch was a systemically important bank in Estonia until 2015, but then it closed its business line serving non-resident clients, under pressure from Finantsinspektsioon, the Estonian financial supervisor. Danske also stopped providing banking services to private individuals in the Baltic states. As a result the volume of deposits and loans at the bank started to decline sharply, as did the number of card payments and other domestic client payments by Danske’s customers.

Because of the steep reduction in the amount of banking services provided, Eesti Pank also decided in 2017 that the Danske branch was no longer a provider of vital services in Estonia.

Danske announced in April 2018 that it would no longer open new accounts for local companies in the Baltic states and it would start gradually to withdraw other services offered to local clients. Essentially Danske Bank was maintaining business lines in the Baltic states that served only the subsidiaries of its clients from the Nordic countries and international corporations that are strongly represented in those countries.

“Finantsinspektsioon has in recent years taken several decisive steps that are extraordinary by European standards to counter any banking activities in Estonia that involve heightened money laundering risks”, said Deputy Governor of Eesti Pank Madis Müller, who handles questions of financial stability and is a member of the Supervisory Board of Finantsinspektsioon.