ABN Amro hit by Dutch money laundering investigation
30 Sep 2019

ABN Amro (ABNd.AS) is being investigated for money laundering in a new blow to shares in the Dutch bank, which prosecutors allege failed to report or probe suspicious transactions for years.

The Netherlands has been the target of several inquiries into suspected money laundering and investigators last year estimated that around 13 billion euros ($14.2 billion) was laundered each year through the country between 2004 and 2014, a sum equivalent to roughly 2% of Dutch GDP.

Dutch prosecutors said in March they were evaluating signs of Dutch bank involvement in a money laundering network which allegedly channeled billions of euros from Russia.

“It’s extremely worrying that ABN Amro is under investigation by prosecutors,” Finance Minister Wopke Hoekstra said on Thursday, adding that the Dutch government is resolved to combat money laundering and “banks have an important gatekeeper function in keeping criminals out”.

ABN Amro shares were down 9.9% at 1005 GMT, as the bank said it had no indication of the impact of the inquiry.

Analysts said they were therefore using a record $900 million fine against fellow Dutch bank ING ING.AS last year as a reference point for any penalty ABN Amro could face.

“This is a clear negative for the shares in our view, particularly in the context of capital return. This represents a clear escalation of the issue. Clearly the dividend for this year is also at risk,” analysts at Barclays said.

The move is part of a broader push by prosecutors in Europe to crack down on lax monitoring of illegal transactions via bank accounts and came a day after German authorities raided Deutsche Bank’s (DBKGn.DE) headquarters over a money laundering scandal at Danske Bank (DANSKE.CO).

The Dutch prosecutors said ABN Amro reported suspicious transactions too late or not at all over a long period, adding it failed to properly investigate client behavior and did not sever ties with suspect clients in a timely fashion.

They did not disclose the period involved, but said the probe was based on information from the Dutch central bank, which earlier this year ordered ABN Amro to review all Dutch retail clients for possible money laundering or other criminal activities.

ABN Amro, which in August had warned of possible fines over failures in client oversight, was notified of the investigation on Wednesday but was not given further details on the scale of the inquiry, ABN spokesman Jeroen van Maarschalkerweerd said.

“This is a top priority for us, we have always known we had to do things better, but we have also always been clear that an investigation such as this might occur,” he added.

NOT RESOLVED

ING was fined in September last year for failing to spot criminal activities financed through its accounts, including bribery payments to foreign officials.

But the Dutch central bank said local banks were still too lax on preventing money laundering.

By Bart H. Meijer, Reuters, 26 September 2019

Read more at Reuters

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