Banks, EU – Baltic States, Financial Services, Legislation

The bank had previously announced that it has chosen the audit firm EY to analyze the material and conduct an external investigation.

"To secure that the external investigation meets necessary demands, Swedbank has today decided to replace EY with Forensic Risk Alliance (FRA)," Swedbank told the stock exchange. It said the external investigator will report the results of the investigation to the CEO and Swedbank's board of directors no later than before the annual general meeting which is to be held on March 28, 2019. The result will then be presented to other stakeholders.

According to the Swedish public broadcaster SVT, extensive and systematic money laundering is suspected to have taken place at the Swedish lender Swedbank, which lasted for nearly a decade and was connected with the Baltic units of Danske Bank.

The investigative journalism TV program Uppdrag Granskning said that at least 40 bln Swedish kronor or some 3.8 bln euros moved between Swedbank and the Baltic units of Danske Bank.

SVT reported that the transfers with a suspicion of money laundering took place in 2007-2015. Among some 50 customers are shell companies and corporate customers that had no business activities.

The financial supervision authorities (FSAs) of Estonia and Sweden have agreed to initiate a joint investigation with the purpose of closely examining the information reported by Swedish media that extensive money laundering allegedly took place at Swedbank.

"The information disclosed by SVT is very serious and together with our Estonian colleagues we will thoroughly investigate the matter to make a comprehensive and in-depth assessment. We will also invite our colleagues in the Latvian FSA to participate in this joint investigation," Erik Thedeen, director general of the Swedish FSA, said.

"Addressing serious anti-money laundering (AML) risks has been our priority since 2014, and we have performed by decreasing substantially non-resident business, by closing major risks and guiding banks to up their risk control standard. We appreciate close cooperation with Sweden and other countries in addressing this potential legacy case," Kilvar Kessler, chairman of the management board of the Estonian FSA, said.

The Bank of Lithuania has also agreed to participate in the investigation with whatever assistance that might be needed by the Swedish and Estonian authorities.

Swedbank's share closed at 173.4 Swedish kronor on Nasdaq Stockholm on Monday, having lost 17.27% of ground over the week.