Wednesday 20 November 2019 11:23 am

Swedbank rocked by ‘bombshell’ report on probe over possible US sanction violations

Swedbank has been rocked this morning by reports that the group is under investigation for possibly breaching US sanctions.

Swedish public broadcaster SVT is reporting that US authorities were probing whether the lender’s Baltic unit had breached sanctions against Russia.

The group’s share price has slipped more than four per cent in morning trading.

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“It’s the kind of bombshell report investors can’t prepare for,” said Jasper Lawler, head of research at London Capital Group.

He added: “Swedbank shares were down over three per cent in early trading and leading the declines on the OMX Stockholm 30 index.

“Swedbank has denied any OFAC (Office of Foreign Assets Control) violations and that seems to have put a floor under share price declines.”

Chief executive Jens Henriksson said he was unaware of any breaches of US sanctions.

He added in a statement: “If there has been unethical behaviour … we should of course get the bottom of it.”

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Henriksson, who took charge last month after his predecessor was ousted over the scandal, also said that an internal investigation into the alleged money laundering would be concluded by early 2020.

Swedbank has been engulfed in a money-laundering scandal which first erupted in February and has since pushed down shares by roughly a third.

SVT reported that €135bn of “high-risk, non-resident” money passed through the group’s Estonian operation over the course of a decade.

In October a trio of senior executives at the Estonian branch of Swedbank were fired amid an ongoing probe into the scandal.

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