Swedbank is setting up a unit to tackle financial crime as it struggles to get on top of a money laundering scandal that has wiped off more than a quarter of its market capitalisation.

The lender has admitted to shortcomings in how it dealt with money laundering after claims that billions of dollars of risky money from Russia and elsewhere flowed through its accounts led to probes by US, Swedish and Baltic regulators.

Sweden’s oldest bank is spending an extra SKr650m ($68m) on anti-money laundering measures this year. The bank reported a 13% rise in operating profit to SKr6.6bn in the first quarter compared with a year earlier. But this was overshadowed by analysts’ concerns over increasing costs, lower than expected capital and the continuing investigation in the US, which was first revealed by the Financial Times.

The biggest lender in the Baltics is searching for a new chief executive and chairman amid hefty criticism from shareholders about how it responded to a money laundering scandal that spread from Danske Bank. Its Danish rival admitted last year that €200bn of questionable money had flowed through its Estonian branch.

About €135bn of ‘high-risk, non-resident’ money flowed through Swedbank’s Estonian operations over a decade, according to a report seen by Swedish public broadcaster SVT. US regulators have opened multiple inquiries into potential money laundering at Swedbank. The new anti-financial crime unit will focus on combating money laundering and terrorism financing as well as dealing with cyber, information and physical security, and fraud prevention.

Anders Karlsson, acting chief executive, said the shortcomings Swedbank had found included reports that customers were connected to other money laundering cases; weaknesses in know-your-customer checks; and a lack of investigation and reporting to authorities of some suspicious transactions. The bank declined to make him available for interview as is customary with its quarterly results.

The bank has also revealed that it had hired law firm Clifford Chance to lead its internal investigation, helped by consultants FTI. That is in addition to a much-criticised and heavily redacted report from consultants Forensic Risk Alliance that focused only on 50 customers named by SVT in a programme in February that started the scandal.