The total provision for the money laundering case is around DKK 15.5bn. Credit: ASSY from Pixabay.

Danske Bank has booked an additional provision of DKK14bn ($1.87bn) as it inches closer to resolving the ongoing money laundering case.

The Copenhagen-based bank said it is holding talks with authorities, and while there is no certainty that a resolution will be reached, it hopes to reach an agreement before the end of this year.  

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The Danish lender is being probed over suspicious transfers of around €200bn from its Estonian branch between 2007 and 2015.

The bank’s involvement in the suspicious activity came to light in 2018 leading to police cases and ousting of the then Danske CEO Thomas Borgen.

Announcing the first quarter results in April this year, the bank had said it expects the fines to be “material” and therefore it will hold back dividend payouts.

Commenting on the Estonia matter, Danske Bank CEO Carsten Egeriis said: “The discussions with US and Danish authorities related to the Estonia matter are now at a stage where Danske Bank can reliably estimate the total financial impact of a potential coordinated resolution amounting to a total of DKK 15.5bn. 

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“In addition to the provision booked in 2018 of DKK 1.5bn, Danske Bank has therefore booked an additional provision of DKK14bn in the third quarter of 2022.” 

During the first nine months of 2022, total income at the bank was down 8% from the year-ago period to DKK28.8bn. 

The bank has reported a net loss of DKK9.2bn during the period under review and a -7.4% return on shareholders’ equity. 

In a separate development, the lender allied with Caverion, which will provide technical security solutions to the bank in Denmark, Finland, Lithuania, Norway and Sweden.

Specifically, the collaboration will cover the maintenance of technical security solutions in all Danske Bank branches, finance centres and corporate offices.