Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Danske Bank rises after agreeing $2 billion U.S. money-laundering fine

Published 12/14/2022, 03:42 AM
Updated 12/14/2022, 03:57 AM
© Reuters.

By Geoffrey Smith -- Shares in Danske Bank (CSE:DANSKE) rose 1.5% to test a three-year high on Wednesday, after Denmark's biggest bank was handed a $2 billion fine for money laundering through its branch in Estonia.

The bank pleaded guilty to defrauding U.S. lenders by laundering money for criminals based largely in Russia and the former Soviet Union from 2007 onward. The bank said it "fully accepts the findings" of the Department of Justice and Securities and Exchanges Commission, "and apologises unreservedly for the unacceptable historical failings and misconduct, which have no place at Danske Bank today."

Under its previous management, Danske had funneled billions of dollars through the U.S. financial system on behalf of criminal clients. It closed its banking operations in all of the Baltic states in 2019, months after the scale of the money laundering became apparent.

Danske Bank stock has never recovered from the revelations: despite rising by over 40% since November, when it signaled that a deal was near by announcing a big provision for the settlement, it still trades at barely half its 2017 peak. The bank said at the time it would suspend its dividend for 2022. However, it remains one of the best-capitalized banks in Europe: its common tier 1 equity ratio, a rough measure of financial strength, stood at nearly 17% at the end of the third quarter, well above regulatory minimum requirements. 

With uncertainty over the financial settlement lifted, the bank expects its return on equity next year to be in the upper part of its target range of 8.5% to 9%.  

Latest comments

Danske bank pleads guilty but forrmer CEO is cleared of all wrong doing that created the ill-gotten gains of money laundering scheme, so who was running the bank?  Protect the wealthy executives and board members from their child the bank doing such crimes. they got paid for their,supposed control but aren't responsible for that control
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.