ABN Amro shares fell 4% in early trading in Amsterdam on Monday, following reports that the Dutch bank might face a higher-than-expected penalty in an ongoing money laundering investigation.
The bank’s annual report published last week described an investigation by Dutch prosecutors, started in September 2019, which was broader than previously stated. It said it was now also suspected of “culpable money laundering”.
Previously, the allegations had been limited to ABN failing to spot accounts involved in money laundering, failing to end relations with suspicious clients and failing to report such transactions to the relevant authorities.
A spokesman for ABN Amro said the lender was fully cooperating with the investigation, but gave no further comment.
The new allegation could mean that the bank was aware of money laundering activities but did not act upon it, a source close to the matter told Dutch newspaper De Telegraaf, which was the first to report the new phrasing in ABN ‘s annual report on Monday.
This could lead to a higher fine for the bank, and could raise the possibility of bank executives being held responsible individually for money laundering.
“The fine could be bigger than what the market had previously expected, since it means that they may have found something more on this,” KBC Securities analyst Jason Kalamboussis said.
“The investigation could also last longer, with likely no quick outcome.”
Dutch bank ING agreed with Dutch prosecutors in 2018 to pay 775 million euros ($925 million) to settle a case over failing to spot money laundering and other criminal activities by its clients.
Although the settlement meant that no bank managers would be prosecuted, a Dutch court in December last year ordered a criminal investigation into the role of former ING CEO Ralph Hamers in the affair after all.