ABN Amro Sees Quarterly Loss After $574 Million Settlement

(Bloomberg) -- ABN Amro Bank NV agreed to pay 480 million euros ($574 million) to end a Dutch investigation that found “serious shortcomings” in the lender’s processes to combat money laundering.

The amount will be booked in the first quarter and the lender expects a “modest” loss as a result, according to a statement on Monday. As part of the settlement, ABN Amro will pay a fine of 300 million euros and a disgorgement of 180 million euros, with the latter reflecting costs the lender had saved, according to the Dutch public prosecutor.

”This settlement marks the end of a painful and disappointing episode for ABN Amro,” Chief Executive Officer Robert Swaak said in the statement.

Swaak, a former PwC Netherlands chairman with experience advising organizations on know-your-customer and anti-money-laundering initiatives, was appointed to the role last year to help the lender move past the probe as well as a tax scandal. He is retreating from large parts of the investment banking business as he focuses on cost cutting and digitization.

ABN Amro said the impact of the settlement will be offset in part by “write-backs as well as impairment releases due to the stable credit quality during the first quarter.” The bank in February scrapped its dividend for 2020 and posted its first annual loss in a decade as the pandemic weighed on lending income and the lender restructured its investment bank.

In a separate statement, the Dutch prosecutor said it’s continuing an investigation of three former ABN Amro executives whom it had identified as suspects in the probe. While it didn’t name the suspects, Danske Bank A/S also on Monday said it’s replacing Chris Vogelzang as CEO after the former ABN Amro executive became the target of a Dutch money laundering investigation. Vogelzang, who had been CEO for less than two years at Denmark’s biggest bank, previously headed ABN Amro’s global retail and private banking activities.

“I am very surprised by the decision by the Dutch authorities,” Vogelzang said in the statement. “I left ABN Amro more than four years ago and am comfortable with the fact that I managed my management responsibilities with integrity and dedication. My status as a suspect does not imply that I will be charged.”

Aside from Vogelzang, Danske said Gerrit Zalm, another former ABN Amro banker, was stepping down from its board.

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