Volksbank fined for breaking money laundering rules

The company behind ASN Bank, RegioBank, and SNS, is not doing enough to combat money laundering and terrorism financing. De Nederlandsche Bank (DNB) reprimanded the Volksbank, owned by the government since 2013, for this. The regulator intends to impose a fine, but the amount is not yet clear.

DNB told De Volksbank that its “systematic integrity analysis” must be in order by April 1 next year. “DNB also announced its intention to initiate the procedure to impose an administrative fine,” the nationalized bank announced with its half-year results.

Money laundering rules have been causing problems for Dutch banks for years. ING and ABN Amro both had to pay hundreds of millions of euros after settlements with the Public Prosecution Service (OM). In 2018, Rabobank was imposed a penalty of 500,000 euros for violating the rules. That amount had to be paid again in 2021 because the bank had not sufficiently improved its procedure.

The three large banks - ING, ABN Amro, and Rabobank - have announced their results for the past few months in recent days. What stood out were the high profits they made due to the increased interest rates, but also the increased costs they incurred to combat things like money laundering. In De Volkskbank’s case, a one-fifth increase in operation costs was not enough to fully comply with the anti-money laundering rules.

“We regret that we were unable to fully fulfill our responsibility as a gatekeeper with regard to customer integrity,” said CEO Martijn Gribnau. “We are doing everything we can to rectify the shortcomings within the period set by the DNB.”

Just like competitors ING, ABN Amro, and Rabobank, De Volksbank benefited fully from the rise in interest rates in the past period. Profits more than doubled in the past six months to 248 million euros. That is an increase of 153 million euros. Those who take out a loan nowadays pay significantly more interest, while De Volksbank spends relatively less money on the still low interest rates on savings.