SEB Says It Ended Business With Most Clients Named in Report
(Bloomberg) -- SEB AB said it’s terminated business with the vast majority of customers identified by Swedish public broadcaster SVT in an investigative piece on money laundering.
The bank has compared the 194 names provided by SVT with its own analysis and found that the clients had “previously been handled,” the bank said in a statement Tuesday. About 95% of the accounts have already been terminated while the remaining clients meet the bank’s screening criteria, SEB said. The shares rose as much as 3% and were up 0.9% as of 10:08 a.m. in Stockholm.
“SEB has compared the names with the bank’s internal analysis, which has served as the basis for the assessment and the comments that the bank has made concerning the Baltic operations,“ it said. The names “are, in all material respects, covered by the bank’s own analysis and do not change the bank’s fundamental assessment.”
Worries that SEB would be dragged into the money laundering scandal that’s enveloped Nordic peers Danske Bank A/S and Swedbank AB were stoked on Friday when SEB said SVT’s program Uppdrag Granskning contacted it in connection with an upcoming report about suspected laundering in the Baltics. That sent SEB shares down 12% on the day. A similar investigation by SVT into Swedbank earlier this year had led to the departure of its top management and multiple probes.
SEB said on Tuesday that the majority of the names on the list were “historical customer relations from Estonia.” The Baltic country’s financial supervisor had reprimanded the bank back in 2006 for its handling of non-resident customers, leading SEB to tighten its monitoring and terminate “several customer relations.”
“This morning’s press release was reassuring,” Sean George, CIO of Strukturinvest Fondkommission, which owns SEB’s CoCo bonds through its Hamiltonian GCO hedge fund, said in an email. “We fully expect the new issue AT1’s that we own to migrate back to par.”
The bank said that when suspected activities have been detected, the bank has reported them to relevant authorities. A few clients still have engagements with SEB, it said.
“Those remaining customers meet the bank’s criteria, and with the information that SEB has about the customers today, there has been no reason to terminate the customer relations,” the bank said. “SEB works continuously to make sure that SEB’s customers live up to the bank’s requirements.”
Chief Executive Officer Johan Torgeby has said that while the bank has no evidence that it was systematically used by criminals to launder money, he can’t rule out there have been incidences. The bank reiterated that statement on Tuesday and said it’s stepped up its investments against financial crime.
“Although SEB historically has lived up to the regulatory requirements, we can with today’s knowledge conclude that neither regulations nor the banking system’s ability have been sufficiently efficient to handle risks of money laundering before 2008,” SEB said. “Since then, SEB’s ability to prevent, detect and report suspected financial crime increased over time.”
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