Moody’s downgrades Danske bank ratings over money-laundering probe


Oct 14, 2018-

US ratings agency Moody’s on Friday downgraded its long-term ratings for Denmark’s biggest bank, Danske Bank, which is at the centre of a scandal over alleged money-laundering. The decision “follows the announcement that the bank is the subject of criminal investigations by the US Department of Justice linked to money laundering through its Estonian branch between 2007-2015,” Moody’s said in a statement. Investors and clients have already headed for the exits amid growing fears of a possibly huge US fine for laundering funds for 15,000 mainly Russian clients. Danske Bank has itself identified the equivalent of 200 billion euros ($231 billion) in “suspicious” transactions from 2007-2015 on behalf of 15,000 clients, including top Russian politicians and companies based in Denmark. According to a Financial Times report, Danske earned 10 million euros in 2013 through mirror trades that used Russian bonds, which the Danish lender acknowledged raised a “potential reputational risk in being seen to be assisting capital flight from Russia”. The ratings agency downgraded its long-term deposit and senior unsecured debt ratings from A1 to A2. Both ratings are within Moody’s “upper-medium grade”. The money-laundering investigation “has increased the probability that Danske will receive substantial financial fines,” Moody’s said, adding that the probe will also “consume a significant amount of resources and managerial focus”. (AFP)

Published: 14-10-2018 08:42

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