Tag Archives: DnB NORD

Major Security Problems at Baltic Bank Group

Documents discovered by EconoTwist’s confirms a major security problem at the Baltic Bank Group DnB NORD, owned by the Norwegian partly state-owned bank DnB NOR. According to a report by the Danish Financial Authority the Baltic bank group is lacking a sufficient IT security strategy, and do not meet the regulatory requirements for IT security in financial institutions. Other documents reveal a unique insight on how the US government are monitoring and controlling foreign bank activity.

DnB NOR Bank ASA New York Branch is prohibited from establishing, maintaining, administering, managing or engaging in a correspondent banking relationship, such as an account for or on behalf of all of the following entities:”

When DnB NORD was established in 2006, they were bragging about their new advanced, state-of-the-art,  technological solutions. Five years later the Financial Authority finds that there’s no fully implemented security policy, and that the Latvian-based bank group on several key business areas do not meet the regulatory requirements of IT security for financial institutions.

Now, that’s something you won’t find in the regular earnings reports from the Norwegian state controlled owner, DnB NOR.

The inspection was conducted by the Danish Financial Authority in October – December 2010, and the report is dated June 17. 2011.

Contrary to most reports of this kind, I have not been able to find an English version, but here’s the conclusions, translated from Danish:

  • “On inspection, the FSA its IT strategy and IT security policy, organizational issues, outsourcing, backup, contingency planning and systems development.”
  • “FSA’s assessment is that the bank in some areas do not meet the regulatory requirements for IT security for financial institutions.”
  • “The bank had not updated IT security and some key business times in relation to IT security is not fully implemented, the Bank has not secured a sufficient legal basis for controlling the main supplier and the reporting rate from this.
  • “The Bank also has a faulty IT security preparedness.”

And the Danish Financial Authority concludes:

“Based on the inspection, FSA have given the bank an order to undertake a risk assessment on the IT security area and prepare an IT security policy based on a current risk assessment. There are also given orders that the bank’s guidelines for outsourcing must follow the law in this area, and that the bank must develop an IT contingency plan.”

Now, let’s have a look at the English version of  the report:

No mention of the IT security problems. This reports the Danish Supervisory Authority examined the 13 largest credit exposures, and carries out spot checks on another 100 credit exposures to corporate- and retail customers.

Here’s the findings:

  • “In some cases we noted shortcomings in the calculation of the indication of impairment. In the opinion of the Supervisory Authority it had, however, no significant effect on the Group’s total impairment charges at the time of the inspection. Bank DnB NORD A/S has been ordered to strengthen the quality of the Lithuanian subsidiary bank’s impairment calculations.”
  • “Prior to the inspection the DnB NORD Group raised its solvency ratio to 13.2 percent. The increase was made as a consequence of discussions with the Supervisory Authority. The actual solvency is 13.5 percent.”
  • “The Supervisory Authority has instructed Bank DnB NORD A/S to have intensified focus on any changes in the financial situation in Lithuania or changes in the country’s legislation that might have influence on the Group’s impairment charges or solvency need.”
The US Instructions
Returning to the security issues:
The Baltic bank’s servers seem to be more or less wide open, and internal documents are available though a simple Google-search.
Below is some of the correspondence with US authorities, revealing the increasingly monitoring of, and control with, any foreign bank that directly or indirectly do business in the US, or with US corporations:
The US Customer Identification Program:
Special Measures
Unlawful Internet Gambling

This is just some examples of the documents I’ve been able to pull out of the DnB NORD system. I’m about to look into the rest, and analyze the importance of these.

I’ll keep you posted!

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Filed under International Econnomic Politics, Laws and Regulations, National Economic Politics, Technology

More Billions Lost In The Baltics

The German bank holding company NORD LB reports increased losses related to their activity in the Baltic countries. In the nine first months of 2009 the losses totals amount to 549 millions euro.  158 millions is caused by the baltic operations in DnB NORD in third quater, after 110 millions in writedowns in Q2. In addition NORD LB has lost almost a billion euro on its shipping portfolio, and set aside another 130 millions to cover more potetial shipping losses.

“It is unclear whether the bank will end the year with a profit, especially since it also shows a 60%  increase in loans with very high risk in the third quarter.”

Stefan Best

(Article in Norwegian, link to original article in German, google translation in English)


DnB NORs partner i Baltikum – NORD LB – skriver ned ytterligere 1,4 milliarder kroner som følge av stadig større tap i den felles eide banken DnB NORD.


Det melder det tyske Handelsblatt.

Tyske NORD LB har et foreløpig resultat på 130 millioner euro i årets ni første måneder, opplyser banken.

I samme periode økte tapsavsetningene fra 225 millioner euro til 549 millioner.

DnB NORD har påførte NORD LB et proposjonalt tap på 158 millioner euro – om lag 1,4 milliarder kroner – hittil år. Det er en øknig på 46 millioner euro fra andre halvår.

– Det er på dette stadium ikke nødvendig å reise ny kapital i DnD NORD, sier styreleder Gunter Dunkel i NORD LB.

60% flere høyrisikolån

NORD LB vil ikke gi noen prognose for året som helhet, men sier at banken forventer at 2009-resultatet vil bli positivt.

Analysesjef Stefan Best i Standard & Poor’s sier til Handelsblatt at det er “uklart” om NORD/LB vil ende opp med overskudd i år, og viser til en økning i porteføljen av høyrisikolån på 60 prosent.

NORD LB består av sju regionale banker, og minst tre av dem kommer til å få milliardtap i 2009, mener Standard & Poor’s.

Den eneste grunnen til at den tyske bankgruppen kan bokføre overskudd i år, er West LB som eies separat for å kunne skjule avslørende risikable aktiva, som ” toxische Werpapiere”, (råtne verdipapirer), skriver Handelsblatt.

Kun to eller tre av bankene i NORD-gruppen vil oppnå et positivt resultat på egen hånd.

Pluss shippingsmell

NORD LB har i tillegg 18 milliarder euro i utestående kreditt i shippingbransjen, og har så langt bokført tap på 959 millioner euro.

Dessuten er det satt av ytterligere 130 millioner euro som “risikoavsetning” knyttet til shippingvirksomheten.

Her er lenke til originalartikkelen i Handelsblatt.

(And here’s the automated translation to English by Google)


Related Posts:

“The Baltic Lab Rat”

“Not Grounded in Reality”

Baltic Loan Losses Could Double

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