Danske Bank shares fall as it faces US criminal investigation over Estonia fraud

Danske Bank shares fall as it confirms criminal investigation by the US DOJ.

Danske Bank shares fall as it faces US criminal investigation over Estonia fraud

Danske Bank shares are lower Thursday, as the bank has confirmed it is in talks with the US authorities over accounts and dealings relating to the money laundering uncovered at its Estonian branch. The Danish bank is also ending its share buyback programme early, as it reassesses its capital requirements.

By 1245 BST, Danske Bank shares were 4.06% lower at DKK159.50. The stock has been trading broadly lower in recent weeks.

Danske Bank facing US criminal investigation

Danske Bank confirmed in a statement Thursday, that it is in talks with the US with regards to the money laundering that occurred at its Estonian branch. The US Department of Justice is also looking at a criminal investigation.

This development comes just days after the Danish bank appointed Head of DK banking, Jesper Nielsen, as interim CEO, to replace Thomas F. Borgen, while they search for a permanent replacement.

“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,” said interim CEO of Danske Bank, Jesper Nielsen.

The bank added that any timing or outcome of these investigations, remains highly uncertain.

Danske Bank ends share buyback programme

In addition to the news the US DOJ is investigating the Danish Bank, Danske Bank also announced it is ending its share buyback programme earlier than planned.

That decision follows an order from the Danish FSA that it reassess its “solvency need in order to ensure adequate capital coverage of the increase in compliance and reputational risks.”

The reassessment has led the bank to the decision that it must increase its CET1 capital ratio target to 20% from 16%.

“In order to remain prudent and in view of the above, Danske Bank’s Board of Directors has decided to discontinue the present share buy-back programme as of today,” Danske Bank said.

The programme had initially been slated to end by February 1st, 2019 at a buyback total of DKK10 billion. It has ended at week 39 with at a buyback total of DKK6.88 billion.

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