Uddrag fra Danske Banks kommentar til mulig bøde til Norges største bank.
DNB (MW) published a press release in which they state they may face a NOK400m fine from the Norwegian FSA (N-FSA), due to inadequacies in their compliance with anti-money laundering regulations. According to DNB, N-FSA states that they are considering to impose a NOK400m administrative fine on DNB, which corresponds to 0.7% of DNB’s annual turnover. Seeing that the N-FSA is at liberty to impose fines in the order of 10% of annual turnover, it seems that the fine is in the lower end of the range, which we interpret to mean that the severity of the breaches are probably limited. DNB also reports that they have not been complicit in money laundering and there are no suspicions of actual money laundering. Hence the fine is ‘only’ caused by inadequate compliance with current regulations and legislation. We note that a NOK400m fine would constitute around 20bp of CET1 capital and with a CET1 ratio of 18.9% against a regulatory requirement of 15.7% and with DNB generating more than 100bp of CET1 (after dividends) per year the fine seems highly manageable. All in all, today’s news is of course slightly credit negative, but mainly because it raises concerns around overall governance practices in DNB.
