EY dropped from Swedbank review after one week

Swedbank has reversed its decision to hire EY to investigate allegations of money-laundering

The Danish bank appointed EY as an external auditor last Thursday after a television programme alleged that 50 customers had moved $5.8bn (£4.3bn) between Swedbank and Danske Bank in a money-laundering scheme.

EY was going to “independently and thoroughly investigate the information that was presented on the TV programme”.

But its reported ties with Dankse Bank – which has implicated in a €200bn money-laundering scandal – led Swedbank to announce yesterday it was replacing the firm with Forensic Risk Alliance (FRA).

“We have taken notice of the reports in media, and to avoid any misunderstandings going forward we decided to change the external audit firm,” Swedbank told the Wall Street Journal.

It then announced it was replacing EY to “secure that the external investigation meets necessary demands”.

FRA will look into the accusations presented on the Swedish news program Uppdrag Granskning and report back to the bank’s CEO and board of directors by the end of next month, just before its annual meeting.

EY Sweden said, “As a matter of policy EY does not comment on individual client matters. [We] can confirm, however, that it is not undertaking the review of Swedbank’s internal controls.”

Danske Bank was last week ordered to close its Estonian branch following the money-laundering scandal. The bank said in September last year that payments made through its Estonian branch were “suspicious”, and admitted that problems relating to this were “much bigger than anticipated”.

The admission followed an investigation by law firm Bruun & Hjejle, which found “a series of major deficiencies” in the bank’s controls.