Swedbank to pay $50mn to New York regulator over disclosure failures

Swedbank has agreed to pay $50mn to the New York State Department of Financial Services after the regulator found the bank failed to provide information on two occasions, according to the Swedish lender. The bank said the payment will be recorded as an expense in the third quarter, bringing a defined accounting impact to the current reporting period.

The settlement concerns disclosure failures in 2016 and 2018, Swedbank said. The bank did not provide further detail in its announcement on the information involved, beyond stating that it had not been disclosed to the New York authority on those two occasions.

Swedbank said the agreement with DFS concludes the remaining inquiries into past deficiencies at the bank. Those inquiries began in 2019 and were carried out in Sweden, Estonia and the United States, according to the lender.

Investigations covered AML controls and disclosures

The bank said the investigations examined its work to prevent money laundering and terrorist financing, as well as its disclosure of information, across the period from 2007 to 2019. Anti-money laundering and counter-terrorist financing controls are central compliance obligations for banks operating across borders, because regulators require institutions to monitor customers, transactions and reporting duties in line with applicable law.

Swedbank’s statement places the DFS settlement within that broader set of reviews. The New York Department of Financial Services supervises financial institutions with activities tied to New York, and settlements of this kind typically resolve specific regulatory findings through agreed payments and other terms. Swedbank’s announcement identified the monetary penalty and the two disclosure failures, but did not describe additional remedial requirements.

Göran Persson, Swedbank’s chair, said the agreement meant the bank had closed the chapter on those matters. “All investigations into the bank’s historical shortcomings have been concluded. Swedbank can now devote full focus to customers, developing the business and delivering shareholder value,” he said in the bank’s statement.

Jens Henriksson, Swedbank’s president and chief executive, also linked the settlement to older conduct. “The DFS investigation has involved conduct from almost a decade ago. We can now put it behind us,” he said.

Penalty to be booked in the third quarter

Swedbank said the amount payable to DFS will be recognised as a cost in the third quarter. Booking the penalty as a cost means it will be reflected in the bank’s accounts for that period, giving investors a clearer view of when the charge affects reported performance.

The lender said the settlement closes investigations in all three jurisdictions where the reviews had been under way. It did not announce any further penalties in connection with the matters described.

This story draws on original reporting from Finextra Research.