Internal fraud suspected at Nordbanken

2/1/1999 7:51 AM EST

An equity broker employed by Nordbanken has been arrested on suspicions of
serious breach of faith and serious embezzlement. The suspicions are based on
unauthorized short-selling of shares, which has continued for several months.
The loss incurred by Nordbanken as a result of such proceedings is estimated
at approximately SEK 290 million. The incident was revealed by the bank's
internal control routines. No losses have been caused to the bank's clients in
this connection.

The fact that the amount could reach such proportions is explained in part by
misleading information repeatedly provided by the broker to the securities
back-office and partly by major fluctuations in share prices during the period
in question.

Group management takes the incident seriously. Although it was revealed by the
bank's internal controls, it will lead to a critical review of applicable
routines in order to make fraudulent manipulation of the bank's systems even
more difficult and to detect irregular practices even faster.

The bank has taken out overall insurance against various kinds of fraud. The
insurance company has been informed of the incident.

The financial fraud department of the police is investigating the matter.

Further information:
Jussi Laitinen, Executive Vice President, Markets, tel. (46-8) 614 78 32
Leif Larsson, Chief of Security, Sweden, (46-8) 614 95 68