Thursday 04 October 2018 11:34 am | Updated: Tuesday 21 May 2019 4:24 pm

Danske Bank faces US probe over €200bn money laundering scandal

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The crisis at Danske Bank deepened today as it confirmed that US authorities are investigating a €200bn money laundering scandal involving suspicious Russian money.

Danske Bank has received "requests for information" from the US Department of Justice (DoJ) about the suspected money laundering which took place in its Estonian branch between 2007 and 2015.

The scandal has already prompted the resignation of former chief executive Thomas Borgen, who had previously headed the bank's international operations.

The US DoJ has a track record of extracting enormous fines from European banks over money laundering failings. It fined Dutch lender ING $900m (£693m) in September after it admitted that criminals had used its accounts to launder money. In 2012 HSBC was forced to pay $1.92bn for money laundering of Mexican drug money.

Danske Bank's interim chief executive, Jesper Nielsen, said: “We are cooperating with the authorities investigating us as a result of the case. However, it is too early to speculate on any outcome of the investigations."

The Danish bank reported last month said that it had reported "almost all" of the 6,200 customers in a so-called non-resident portfolio. As much as €200bn flowed through those accounts, with the heavy involvement of UK limited liability partnerships.

Some 42 employees and agents have been deemed to have been involved in some suspicious activity, while eight former employees have been reported to the Estonian police.

The bank also announced today that Danish regulators had forced them to reassess the amount of capital it must hold, bearing in mind "the increase in compliance and reputational risks".

Danske said it will stop a share buy-back programme due to end by the end of February as part of its aim for a core equity tier one capital ratio of around 20 per cent, up from 19 per cent.