A Danish high court has increased the prison sentence for a former manager of OW Bunker’s Singapore arm to five years, after prosecutors appealed against the original 18-month sentence for actions that contributed to the marine fuel supplier’s collapse, Reuters reported. OW Bunker filed for bankruptcy in 2014 just eight months after listing in Copenhagen, partly due to losses on an estimated $120-$130 million credit line given by its Singapore-based arm to small local company, Tankoil Marine Services.
The two biggest banks in the Nordic region saw their market values shrink on Tuesday after publishing first-quarter results that disappointed investors, Bloomberg News reported. Danske Bank A/S said it now expects net interest income to be lower this year than in 2018 as the higher cost of funding brought on by its money-laundering scandal erodes its top line. Its shares plunged more than 7 percent after the market opened in Copenhagen. At Nordea Bank Abp, net interest income missed market expectations amid growing pressure from its biggest investors to boost revenue.
Soon, the government of Japan might be the only issuer paying less to borrow than Danish homeowners, Bloomberg News reported. Danes are about to learn whether they can get a 30-year mortgage at a fixed rate of 1 percent. That’s less than the governments of Switzerland and Germany pay their long-term investors. Denmark finances its home loans through the world’s biggest covered-bond market. The securities are coveted as some of the safest around, thanks to the huge cover pools backing the debt.
Scandinavians are taking a hard look at their institutions as allegations of systematic money laundering rock the entire region, Bloomberg News reported. With Swedbank AB becoming the latest lender to get dragged into a dirty money scandal that’s already engulfed Danske Bank A/S, those at the top of Sweden’s financial establishment are speaking out. Hans Lindblad, the director general of the Swedish National Debt Office, says the financial industry now risks losing the trust of the people. He says the consequences of that would be dire for the whole economy.
Danske Bank has been forced to close all operations in the Baltics and Russia in response to the largest money-laundering scandal, which has prompted EU authorities to launch an investigation of Danish and Estonian regulators. The bank was given eight months to return customer deposits and transfer its loan contracts to another provider in Estonia, after a report released last autumn revealed the extent of the failures at the bank, the Financial Times reported.