The U.S. Department of Justice announced it would not impose any fines or penalties on Swedbank after completing its multi-year investigation into alleged money laundering in the Baltic region. The probe, which began in 2019 and focused on suspicious transactions from 2010 to 2016, represented the most significant legal overhang on the bank’s balance sheet. With the DOJ’s decision finalized, Swedbank avoids a potential penalty that analysts had estimated could have reached several hundred million dollars.

In early trading on Thursday, Swedbank shares climbed as much as 6.8% following news of the DOJ’s closure of the case, before settling back to finish roughly 5.5% higher. The stock has now appreciated nearly 50% over the past 12 months, outperforming its Nordic peers. Trading volume surged to more than double its 30-day average, signaling strong investor interest in the removal of the legal cloud.

Institutional investors have largely reacted positively, with several global fund managers increasing their weightings in Swedbank by an average of 30 basis points, according to market surveys. Analysts at two major brokerage firms raised their target valuations by 10% and 12%, citing renewed confidence in the bank’s ability to refocus on core lending and wealth-management businesses. Management has reiterated its guidance for return on equity to exceed 12% by year-end, now unhampered by any imminent regulatory penalties.