Danske Faces $2 Billion in Fines for Laundering Case, Jyske Says
07 Jan 2020

Danske Bank A/S probably will be fined around 13.5 billion kroner ($2 billion) this year by authorities in Denmark, the U.S. and the U.K. as investigations into Europe’s biggest money laundering scandal draw to a close, according to estimates by Jyske Bank.

Danske has admitted that a large part of 200 billion euros ($223 billion) in transactions at an Estonian unit were suspicious. The Copenhagen-based lender is cooperating with probes by the U.S. Department of Justice and the U.S. Securities and Exchange Commission, among others.

Penalties tied to investigations will drive up Danske’s yearly operating expenses by almost 50% this year, to 42.4 billion kroner, according to estimates by Jyske analyst Anders Vollesen. Costs will probably return in 2021 to more normal levels of around 26 billion kroner.

“Of course the timing and size is subject to great uncertainty,” Vollesen said by email. “We have looked at previous cases to calculate the expected size in each region, among others the Deutsche Bank mirror trading fine imposed by the U.K. FCA in 2017.”

Danske shares have taken a beating since it revealed in September 2018 the full dimensions of the laundering. It now trades at a large discount to peers, and Jyske, which recommends buying the stock, says the current price more than incorporates the consequences of the laundering scandal.

By Frances Schwartzkopff, Bloomberg, 3 January 2020

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