Home Finance Danske warns of potential fine over Estonia case, axes dividend

Danske warns of potential fine over Estonia case, axes dividend

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Danske Financial institution indicators are seen on the financial institution’s headquarters in Copenhagen, Denmark October 22, 2019. REUTERS/Jacob Gronholt-Pedersen

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COPENHAGEN, April 28 (Reuters) – Danske Financial institution mentioned on Thursday it confronted a doubtlessly “materials” wonderful over one of many world’s greatest cash laundering scandals revealed in 2017 and would consequently not pay a dividend for the primary quarter.

Denmark’s greatest lender is beneath investigation by authorities in america, Denmark, France and Estonia over 200 billion euros ($209.70 billion) of funds that have been funnelled by way of its now closed Estonian department between 2007 and 2015.

The revelation of Danske’s involvement within the cash laundering scandal led to police costs towards the financial institution in addition to the exit of Danske’s then chief govt, Thomas Borgen.

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“Danske Financial institution is now in preliminary discussions with U.S. and Danish authorities on decision of the Estonia matter,” the financial institution mentioned, including that it was not but in a position to reliably estimate the timing or measurement of a possible wonderful or settlement.

Such a wonderful was prone to be “materials”, it added.

Danske mentioned in February it will pay out dividends in tranches this yr with the intention to guarantee a “prudent capital administration in mild of the Estonia matter.” learn extra

Shares in Danske initially fell after the announcement however traded up 1.43% by 1250 GMT.

“That’s most likely as a result of prospect of this case quickly changing into a factor of the previous,” mentioned Nordnet analyst Per Hansen, who mentioned a possible wonderful may very well be between “a number of billions” and as much as 10 billion Danish crowns ($1.41 billion).

($1 = 7.0893 Danish crowns)

($1 = 0.9537 euros)

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Reporting by Nikolaj Skydsgaard; modifying by Jason Neely and Susan Fenton

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