(Bloomberg) -- Foreign investors have this year dramatically reduced their share holdings in Danske Bank A/S, as they digest news of its involvement in a vast money laundering scandal.
Offshore holders sold a net 3.5 billion kroner ($520 million) of Danske shares in the first six months of 2019, the biggest selloff to hit any Danish stock in the period, according to data published by Denmark's central bank on Friday. Foreigners now own 40% of the bank compared with 50% one year ago.
Shares in Danske fell 1.9% in Copenhagen trading on Friday. Bloomberg's index of European financial stocks was down 0.6%.
Danske shares have plunged about 60% since the beginning of last year, as the market learned of the bank's role in a $230 billion Estonian laundering scandal. The revelations have led to the dismissal of several of the Copenhagen-based lender's top executives and investors are bracing themselves for significant fines amid criminal investigations across Europe and in the U.S.
Whole foreigners have dumped shares in Danske, Denmark's biggest bank, they have increased their overall holdings in the country's equities. Offshore investors about $200 billion in Danish shares, which is up 16% from the beginning of the year, the central bank data showed. In total, they own 52% of Denmark's stocks.
BlackRock Inc. is among foreign investors to have offloaded Danske shares recently. In a May filing, Danske said the U.S. investment manager owned less than 5%. Meanwhile, Denmark's two largest pension funds, ATP and PFA, have both been net buyers of Danske since the laundering scandal erupted.
Read more: Biggest Nordic Money Managers Hoard Banks in Laundering Scandals
Foreigners have mainly been net buyers in Vestas Wind Systems A/S and DSV A/S this year, according to the central bank data .
To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net
To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net
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