ING to pay $900 million to end Dutch money-laundering probe

Bloomberg

ING Groep NV agreed to pay 775 million euros ($900 million) to settle an investigation by the Dutch prosecutor into issues including money laundering and corrupt practices in one of the biggest fines ever given to the country’s banks in a criminal case.
The lender acknowledged “serious shortcomings” in executing customer due diligence policies to prevent financial crime at its Dutch unit from 2010 through 2016, according to a statement from the Amsterdam-based bank on Tuesday. The lender is taking action against a number of current and former senior employees in relation to the case, though said that it expects to resolve the matter with the US Securities and Exchange Commission without further fines.
The investigation focused on the bank’s role in matters including unusual payments by VimpelCom Ltd. to a company owned by a Uzbek government official, the Dutch public prosecution office has said. VimpelCom, which has changed its name to Veon, pleaded guilty in 2016 to violating US corruption laws and agreed to a $795 million settlement with US 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, the prosecutor said.
“Given the severity of the issues and the fact that the US justice department was involved in the investigation, I had expected the total fine to add up to several hundreds millions of euros,” Robin van den Broek, an analyst at Mediobanca, said.
ING shares fluctuated between gains and losses in early trading in Amsterdam with the stock down 1.3 percent at 11.5 euros.

Quarterly Charge
The payment will consist of a 675 million-euro fine and 100 million-euro disgorgement, with the total amount being taken as a one-off charge in the bank’s third-quarter results, the bank said. Previously, it had just said that it may have to pay a significant amount to end the case. The 100 million-euro payment represents the underspend by ING during the period in question on staffing for the implementation and execution of policies and procedures.
The bank’s executive board will waive their bonuses for 2018 because of the fine.
“We are taking a number of robust measures to strengthen our compliance risk management and support a strong risk culture and will be making further improvements to ensure we can play a full role in contributing to protecting the integrity of the financial system,” Vincent van den Boogert, CEO of ING in the Netherlands, said.