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BANKING

Lending scandal rocks Handelsbanken

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.

Lending scandal rocks Handelsbanken

“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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BREXIT

Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
 
 
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
 
 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
 
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
 
Barclays and Coutts have also started contacting customers. 
 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
 
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 
 
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