COPENHAGEN • Danske Bank A/S said the US has started an investigation into a money laundering case involving Denmark’s biggest bank that has already toppled its CEO and triggered numerous other probes.

The development comes as criminal investigations are underway in Estonia and Denmark, and after Danske said that a large part of about US$235 billion (RM975.25 billion) that flowed through a unit in the Baltic country between 2007 and 2015 may need to be treated as suspicious transactions.

The bank has relieved CEO Thomas Borgen of his duties and reported several employees to the police in connection with the case.

Danske said yesterday it has “received requests for information from the US Department of Justice (DoJ) in connection with a criminal investigation relating to the bank’s Estonian branch conducted by the DoJ.” The bank said it is cooperating with all the relevant authorities.

Andreas Hakansson, an analyst at Exane BNP Paribas, said it’s “no surprise” that the US is now looking into the case. “When you have this many suspicious transactions, you can assume some of it would be in violation of US rules and have the DoJ investigate.”

“The concern will now be how big a fine it will be as it’s completely different if it’s issued by a US or European authority,” he said. In Denmark, Business Minister Rasmus Jarlov has already said that Danske may face a fine as high as US$630 million.

Shares in the bank fell as much as 4.6% after the market opened in Copenhagen, pushing it to the bottom of Bloomberg’s index of European financial stocks.

Meanwhile, there’s growing evidence that Danske represents just a small part of a European laundering problem, with cross-border transactions through Estonia alone reaching more than US$1 trillion between 2008 and 2015.

The Estonian central bank has made clear that cross-border transactions include non-resident and resident flows. It can’t provide an estimate for non-resident flows. The cross-border data compares to Estonia’s GDP in 2017 of €23 billion, or US$26 billion.

Hermitage Capital CEO and co-founder Bill Browder, who is behind a number of criminal complaints against Danske for its alleged laundering breaches, said the scandal uncovered in the Estonia unit involves other Nordic banks, according to an interview with Sweden’s Dagens Industri.

Swedbank AB, SEB AB and Nordea Bank Abp all put out statements on Wednesday, underscoring their efforts to combat money laundering and noting that they hardly have any non-resident accounts. In September, Nordea together with DNB ASA of Norway sold a 60% stake in Baltic lender Luminor to Blackstone, significantly reducing their exposure to the region.

In a separate statement yesterday, Danske said it is discontinuing its share buyback programme following an order by the financial regulator in Denmark.

A programme targeting as much as 10 billion kroner (RM6.22 billion) in buybacks through February will be abandoned, after the bank purchased shares as worth about 6.8 billion kroner. — Bloomberg