Danske money laundering scandal leads to capital add-ons

Danske Bank added Dkr5 billion ($800 million) to its Pillar 2 add-on for compliance and reputational risk in the third quarter, on the orders of the Danish regulator following a money laundering scandal at its Estonian branch.

This was in addition to a Dkr5 billion charge brought in the second quarter “to ensure adequate capital coverage” as the watchdog probed the extent of the misconduct.

The add-ons pushed Danske’s management to revise its target Common Equity Tier 1 (CET1) capital ratio

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