The state prosecutor said it was too early to say if the investigation would result in charges. A spokesman for the office declined to comment about any potential targets or on how long the probe might take.
Danish anti-money laundering legislation allows for financial penalties tied to the number of suspicious transactions, meaning fines may “significantly exceed profits,” prosecutors said.
In a survey of five analysts by Bloomberg last month, estimates of a potential fine for Danske ranged from a high of $4.7 billion to a low of $315 million, with at least two saying the bank may avoid penalties altogether.
Danske shares slid 0.5 percent on Tuesday in Copenhagen, bringing this year’s decline to 25.5 percent. That compares with a 10 percent drop in the Bloomberg European Banks index. Analysts Kapilan Pillai at Jefferies International and Paulina Sokolova at Barclays said in recent notes the stock is now cheap relative to peers.
With the case having spooked investors, Danske Chief Executive Officer Thomas Borgen has apologized publicly for Danske’s failure to act sooner. Borgen said in June that he and the board had discussed whether he should step down, but that it was decided his experience was needed to steer the bank.
Danske said it would be assisting prosecutors in their investigation.
“We have a good and constructive dialog on an ongoing basis with the authorities, and we will be at the service of SOIK if it needs further clarification on specific matters,” Flemming Pristed, Danske’s general counsel, said in a statement.
Danske Bank said last month it will donate the gross income from suspicious transactions in its Estonian non-resident portfolio (roughly 1.5 billion kroner, or $233 million) to support social programs, including combating financial crime.
The lender agreed in December to pay a $2 million fine after prosecutors charged the bank with breaching rules requiring monitoring of transactions with correspondent banks. In May, Denmark’s financial supervisor raised Danske’s capital requirements by 5 billion kroner as part of a scathing report on the bank’s multiple failures to halt the laundering.
Business Minister Rasmus Jarlov welcomed the probe and said the government would “tighten anti-money laundering even more.”