SEB became the latest Scandinavian bank to be fined by regulators over weak anti-money laundering controls and governance in its Baltic operations, in a scandal that has hurt the image of northern Europe.
On Thursday Swedish regulators fined SEB, the large Stockholm-based lender controlled by the Wallenberg family of industrialists, SKr1bn ($107m) for not identifying the risk of potential money laundering in Estonia, Latvia and Lithuania. Estonian regulators also fined it €1m.
“Despite the increased risk of money laundering in the Baltics, the bank has acted too little and too late,” said Erik Thedeen, director-general of the Swedish Financial Supervisory Authority.
SEB’s fine is a quarter of the level imposed by Swedish regulators on Swedbank, Sweden’s oldest bank and the largest lender in the Baltics. Both Swedbank and Danske Bank, Denmark’s biggest lender which had its own €200bn money-laundering scandal, ousted their chief executives and chairmen over their dirty money problems.
SEB recently replaced its head of Baltic banking but otherwise has not changed any senior managers or directors over the affair. The bank said on Thursday that it had received a “remark” from regulators, which it noted was a “lower degree of administrative sanction”.
Johan Torgeby, chief executive, said the bank would analyse the decision. “We always strive to adhere to current regulations and our high internal standards, and we continuously develop the bank’s abilities to prevent, detect and report suspected money laundering and other types of financial crime,” he said. “That work is of highest priority and will never end, not least since crime constantly finds new ways.”
Swedish regulators investigated the period between 2015 and 2019. This was after the main money laundering allegations facing Swedbank and Danske, which took place from about 2008-15.
The probe found that SEB had “deficiencies in identifying and managing the risk of money laundering” from some non-resident customers and owners. Non-resident customers — meaning those not based in the Baltics, instead often residing in Russia or other former Soviet states — were at the heart of Swedbank’s and Danske’s problems in the Baltics as well.
The Swedish regulator complained that SEB’s internal control functions did not have sufficient resources and that, despite attempts by the bank to correct this, it had still failed to comply with the law.
Both Swedbank and Danske are also under investigation by US regulators. Shareholders are concerned that they could impose higher fines than local authorities.
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