Moody’s said that recently disclosed information published by SEB Bank indicates an increased risk of money laundering, according to an official press release. To note, SEB published non-resident transactional data for its Estonian operations during 2005-2018 last week. Moody’s assessed the disclosure as credit negative, arguing that SEB may have facilitated money laundering at its Estonian subsidiary. The rating agency noted ongoing investigations by Swedish and Estonian authorities expose SEB to potential financial and reputational risks that could weaken the bank’s franchise.
To note, SEB said its Estonian non-resident customer flows were around EUR85bn in the period 2005-2018, out of which approximately 30% or EUR26bn were defined as “low-transparency” non-resident Estonian customers and mainly occurred in the period 2005-2008. SEB noted these are customers who would not nowadays meet the know-your-customer criteria and cannot be linked to a legitimate business.
Meanwhile, Sweden’s investigation continues in collaboration with the Estonian financial supervision authority. Proceedings may be initiated against SEB with an announcement about it likely in Q1’20, Moody’s noted.