ING Drops After Saying Probe May Lead to Significant Fines

  • Dutch bank suspected of facilitating international corruption
  • Prosecutors looking at VimpelCom payments to Uzbek official

ING Groep NV, the biggest Dutch bank, said it may face “significant” penalties in connection with a criminal investigation in the Netherlands related to corruption and money laundering. The shares fell the most in almost nine months.

The investigation focuses on the bank’s role in matters including unusual payments by VimpelCom Ltd. to a company owned by a Uzbek government official, Marieke van der Molen, a spokeswoman for the Dutch public prosecution office, said by email. ING has also received related requests for information from U.S. authorities, the bank said in its annual report published earlier this month.

“Given that the matter is under investigation, we cannot comment further other than that we are cooperating with the investigations,” Raymond Vermeulen, a spokesman for Amsterdam-based ING, said by email late yesterday.

ING fell as much as 6.1 percent. The shares were down 3.7 percent at 13.87 euros as of 4:30 p.m. local time, valuing the Dutch bank at 53.8 billion euros ($58 billion).

VimpelCom, which has changed its name to Veon, pleaded guilty in 2016 to violating U.S. corruption laws and agreed to a $795 million settlement with U.S. and Dutch authorities in a case related to its subsidiary in Uzbekistan. ING is suspected of failing to report unusual transactions or not reporting them in time and of failing to carry out adequate customer due diligence, Van der Molen said. By those actions, the bank may have facilitated international corruption and money laundering, she added.

“Penalties by U.S. authorities on similar criminal proceedings have been very high in the past and we therefore expect investors to react nervously to ING’s involvement in this case,” Matthias De Wit, a Brussels-based analyst at KBC Securities, said in an investor note.

ING said in its annual report that it’s too early to predict the results or timing of the ongoing investigations “nor to estimate reliably the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome, which could be significant.”

Separately, the Guardian newspaper reported earlier this week that cash flowing from Russia through a vast money-laundering network sometimes ended up passing through the world’s largest banks, including ING. All of the banks named in the story said they have strict money-laundering controls, though none challenged the data’s authenticity, according to the Guardian. Vermeulen declined to comment on that report.

Dutch paper Het Financieele Dagblad reported on the Dutch criminal probe on Tuesday.

— With assistance by Fred Pals

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