22 Jul 2019
Efforts to improve anti-money-laundering controls continue to weigh on the financial results of Nordic banks, which have faced allegations in recent months of moving dirty money.
The region’s largest lenders— Swedbank AB, Nordea Bank ABP and Danske Bank A/S—said this week that investments in new compliance systems and staff members have taken a bite out of quarterly profits. The banks have been swept up in the wave of crises over alleged compliance lapses that have rocked Europe’s banking sector.
The uptick in compliance spending comes at a tricky time, as lenders across the continent face an outlook for lower interest rates and uncertainty surrounding the U.K.’s planned exit from the European Union.
“The banks in my view that will be successful in the future are the banks that tackle compliance issues head on,” said Chris Vogelzang, Danske’s chief executive, during the bank’s quarterly call Thursday.
Mr. Vogelzang took the helm at Danske in May. Danske revealed last September that more than $230 billion in suspicious funds, mostly from Russia, flowed through a small branch in Estonia. The bank faces a series of probes related to those transactions.
Investments in additional compliance staff and technology pushed quarterly expenses higher, and will continue to do so in the months ahead, executives said.
By Kristin Broughton, The Wall Street Journal, 18 July 2019
Read more at The Wall Street Journal
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