On 31 Jan. 2025, Norion Bank stated that the Swedish Financial Supervisory Authority (FSA) has asked for a statement from the bank regarding its investigation into the bank's adherence to anti-money laundering regulations. The investigation began in May 2023 and includes Norion Bank and other institutions.
According to Norion, The Swedish FSA's preliminary findings suggest that Norion Bank has breached the Anti-Money Laundering and Counter-Terrorism Financing Act, as well as Swedish anti-money laundering and financing of terrorism regulations.
We consider any potential compliance breach in these areas as serious. However, we currently lack sufficient information to evaluate the severity of the FSA's findings or the potential consequences for the bank. According to the bank's press release, the FSA is waiting for the bank's response by 21 Feb. 2025, after which they will decide whether to take action against the bank and how to proceed.
As of 30 Sep. 2024, the bank reported a Tier 1 capital ratio of 16.1%, which is above our 15% driver for a potential downgrade of the bank's issuer rating. We believe a potential fine for misconduct would likely fall within this buffer. However, the extent and probability of regulatory intervention remain uncertain.
We will monitor the discussion and possible outcomes of this investigation.
Recent rating actions:
i) Norion Bank long-term issuer rating lowered to 'BB+'; Outlook stable,18 Dec. 2024
This commentary does not constitute a rating action.
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com