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Lending scandal rocks Handelsbanken

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Lending scandal rocks Handelsbanken
16:49 CEST+02:00
A high-ranking manager at Swedish bank Handelsbanken has been arrested on suspicion of having lent out millions of kronor without requiring the be secured by any collateral.

“An investigation is underway,” Handelsbanken spokesperson Bengt Carlsson told the Expressen newspaper.

Carlsson added that no customers have been affected by the scandal, which involves a manager who, according to Expressen's sources, approved loans totaling “tens of millions of kronor” to several companies without requiring any collateral to secure the funds.

In one case, the manager allowed a company to borrow 3 million kronor ($453,000).

After being reported to police by Handelsbanken, the manager was arrested and remains in police custody, the Svenska Dagbladet (SvD) newspaper reported.

A prosecutor has been brought in to investigate the matter at the same time that Handelsbanken is conducting its own internal investigation.

The manager, who left the bank immediately after the scandal became known, is under suspicion of having violated the bank's internal regulations and is accused of “unauthorised lending”.

However, Handelsbanken has refused to release any further details about where in Sweden the manager was based.

“Because there is an ongoing investigation, we don't want to make any statements,” Carlsson told SvD.

According to Expressen, the manager had a “leading position” at Handelsbanken which gave him the right to approve loans to companies worth millions of kronor.

In light of the criminal investigation, Handelsbanken has the right to nullify the loans at a later stage, a move which could put the companies at risk for a financial collapse if they are unable to produce collateral.

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