FILE PHOTO: The Nordea Bank AB logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren/File Photo
Nordea said it had 'reviewed a large number of customer relations and transactions' and ';reported to the relevant authorities when we’ve found suspicious behaviour' © Reuters

The Nordic money-laundering scandal deepened on Monday after media reports linked Nordea, the region’s biggest bank, to about €700m in suspicious money flows from Russia and other former Soviet states. 

Skittish investors sent shares plunging in several Nordic lenders with exposure to the Baltic region, where many of the alleged dirty-money flows appear to have originated, initially based purely on a listing for a television programme in Finland.

Nordea handled about €700m, according to the subsequent Finnish broadcast and a Danish newspaper report based on allegedly leaked documents involving several failed banks from what they called a “laundromat”. 

The lender, which last year moved its headquarters from Sweden to Finland, has already been sucked into a money-laundering scandal that has also hit Danske Bank and Stockholm-based Swedbank

Bill Browder, a US-born investor who is a prominent critic of Russian president Vladimir Putin, has filed criminal complaints against Nordea in all four of the main Nordic countries, accusing the bank of handling hundreds of millions of euros of suspect funds. Several of the countries’ prosecutors are examining the claims, although Swedish authorities have declined to investigate. 

Shares in Nordea, which fell as much as 6.5 per cent on Monday, closed down almost 4 per cent.

The latest allegations were “broadening and deepening our knowledge rather than breaking new ground”, said Graham Barrow, an expert on money-laundering who examined some of the documents. “But it does take the problem to centres of previously well-regarded banking such as Nordea in Copenhagen.”

One of the examples quoted by Danish daily Berlingske involved a New Zealand company with a Filipino housewife as a director receiving money from Azerbaijan in an account registered in Copenhagen. 

Nordea said it had “reviewed a large number of customer relations and transactions” and “reported to the relevant authorities when we’ve found suspicious behaviour”. 

“We recognise that our systems in the past may not have been robust enough to counter this sort of financial crime,” the bank said in a statement. “For that we are truly sorry.”

Nordic banks, once seen as havens following the global financial crisis, are coming under growing pressure both from their business in the neighbouring Baltic countries, where many of them expanded in the early 2000s, and increasingly from their domestic units. 

Shares in Danske halved last year after it conceded that €200bn from former Soviet states had flowed through its tiny Estonian branch over a nine-year period. 

Swedbank lost a fifth of its value last week after Swedish TV alleged $5.8bn had moved between Swedbank and Danske accounts with some of its customers showing “several risk indicators of suspected money laundering”. 

Swedbank has declined to comment on the specific allegations, citing bank secrecy, but conceded “there is a risk” a suspicious payment slipped through its system.

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