Having trumped up the dangers of unregulated cryptocurrencies earlier this 12 months, Dutch financial institution ABN Amro NV finds itself within the midst of a significant money-laundering scandal.
On Sept. 26, Bloomberg reported on information of a prison probe into the financial institution’s alleged failures to report suspicious transactions and to adequately vet its purchasers. ABN AMRO — which stays over 50% government-owned after a expensive bailout — noticed its shares hunch by as a lot as 10.3% in Amsterdam buying and selling.
This represents the best plummet since June 2019, with the financial institution’s Additional Tier 1 bonds falling essentially the most in six months, as Bloomberg notes.
Investigation below anti-money laundering and terror financing legal guidelines
The Dutch prosecutor’s workplace additional revealed that not solely does ABN AMRO face scrutiny over its alleged compliance failures, however it is usually being investigated below Dutch anti-money laundering and terror financing legal guidelines. Exact particulars of the investigation haven’t been disclosed.
Following a warning from the Netherlands’ central financial institution, ABN AMRO had introduced this July that it wanted to conduct higher due diligence into all of its 5 million retail purchasers.
It has spent €220m to bolster its procedures in its client banking, bank card and small enterprise lending operations — taking a €114 million provision for checks in Q2 along with €85 million in 2019. The financial institution had indicated it may face sanctions from authorities however famous that it couldn’t put together for a potential superb as the quantity couldn’t be estimated on the time.
As the Financial Times has reported, ABN AMRO additionally tripled its employees numbers to over 1,400 in areas reminiscent of compliance, monetary crime and anti-money laundering.
The state of affairs imperils the Dutch authorities’s pledge to ultimately dump its 56% stake within the financial institution — and the uncertainty is redoubled by the announcement of CEO Kees van Dijkhuizen to go away when his time period ends in April 2020.
Notably, ABN AMRO’s rival ING Group final 12 months paid a record fine for “serious shortcomings” in working to forestall monetary crime, facilitating cash laundering by means of its accounts for years.
Banks below scrutiny
ABN AMRO’s disaster comes scorching on the heels of a scandal involving Danske Bank’s unit in Estonia, whose former head was found dead earlier this week. He had been a witness — although not a suspect — in a significant money-laundering probe into the unit.
Also this week, regulation enforcement officers raided Deutsche Bank AG this week in reference to the Danske Bank scandal.
This May, ABN AMRO’s senior press officer revealed that the financial institution would discontinue its plans to launch a custodial Bitcoin (BTC) pockets, having concluded that “cryptocurrencies because of their unregulated nature are at the moment too risky assets for our clients to invest in.”
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