Wed, 5th Dec 2018
Shares in Deutsche Bank hit a record low and the German DAX plumetted on Tuesday. Deutsche Bank admitted that it had been processing payments for Danske Bank in Estonia.
Danske Bank has been the subject of a scandal recently, and Deutsche Bank says that it had been a payment processor for the scandal-hit bank, although it ended that relationship in 2015, as it suspected that there was some suspicious activity. In spite of this statement, Deutsche Banks’s shares dropped by more than 4 percent.
Danske Bank has been accused of being involved in a £177 billion money laundering scandal involving a branch in Estonia. The allegations have sparked a criminal investigation and led to the loss of the CEO and chairman. The US Department of Justice is probing the bank and an investigation by the bank has found that there are several major deficiencies in its anti money laundering controls. More than half of the bank’s Estonian customers were suspicious, and the bank’s interim CEO, Jesper Nielsen, says that the affair has tarnished the bank’s reputation.
Danske Bank acknowledges that the money laundering controls it had in place in Estonia were not sufficient, but they issued a report saying that the chief executive, chairman and board that were in place at the time had not breached any of their legal obligations. The FSA says that it has not found sufficient basis for launching a case against members of the Danske Bank management.