STOCKHOLM (Reuters) – Swedbank (SWEDa.ST) CEO Jens Henriksson pledged to “get to the bottom” of an alleged transfer of funds from a Russian arms company which Swedish broadcaster SVT on Wednesday said may have violated U.S sanctions against Russia.
FILE PHOTO: A view of the Swedbank in Tallinn, Estonia October 3, 2019. REUTERS/Ints Kalnins/File Photo
Swedbank, which is already conducting an internal investigation into suspected money laundering, said it had not been aware of such a violation.
Swedbank shares were down 3.8% at 1110 GMT.
Henriksson made the statement after public service broadcaster SVT aired an investigative show on its website on Wednesday morning. It cited a list of transactions between Swedbank’s Baltic branch and bank accounts in the United States provided by an unidentified Wall Street source.
Swedbank is already under investigation by U.S. authorities for its role in an ongoing money laundering scandal in the Baltics but the new information risk exposing Swedbank to greater scrutiny from the United States.
In its report, SVT alleged Swedbank transferred more than 1 million euros ($1.1 million) from Russian arms firm Kalashnikov Group to a U.S. subsidiary via the business network of a Russian oligarch who is a shareholder in Kalashnikov.
Henriksson said the bank’s own internal investigation is expected to be concluded in early 2020.
“Conclusions from the investigation will be communicated,” Henriksson said.
Kalashnikov’s Russia-based parent company was placed on a U.S sanctions list after Russia’s annexation of Crimea from Ukraine in 2014.
Kalashnikov’s U.S-based subsidiary is permitted to sell arms it produces in the United States on condition it receives no financial transfers from its parent firm, according to SVT.
A Kalashnikov spokeswoman declined to comment on the SVT report.
Swedbank has lost around 40% of its market value since allegations surfaced that its Estonian branch processed suspect gross transactions of up to 20 billion euros a year from mostly Russian non-residents between 2010 and 2016.
The scandal started with Danske Bank, Denmark’s biggest bank. It is under investigation in several countries over 200 billion euros ($220 billion) in suspicious payments moved through its Estonian branch between 2007 and 2015 in one of the largest money laundering scandals in history.
Speaking to SVT, Henriksson said: “I’m going to take this information and give it to our investigators and we’ll take a closer look at it.” He declined to confirm the existence of such customers.
In October, the Estonian state prosecutor said it was opening a criminal investigation into Swedbank.
Additional reporting by Anna Ringstrom; editing by John O’Donnell and Mark Potter