The shares tumbled after a terse company statement
The shares tumbled after a terse company statement ANP / RICK NEDERSTIGT

Dutch prosecutors are targeting the country's third-largest bank ABN Amro in a money-laundering probe, the bank and prosecutors said Thursday, sending its share price into a nosedive on the Amsterdam stock exchange.

The stock fell by around 9.5 percent on the AEX index shortly after opening following ABN Amro's terse announcement that public prosecutors told the bank it was "the subject of a probe under legislation against money laundering and the financing of terrorism."

"ABN Amro will cooperate fully with the probe," it added.

Its share price further plunged by over 10 percent by lunchtime trade.

"ABN Amro allegedly has not carried out client due diligence sufficiently, was insufficiently monitoring bank accounts and did not report unusual transactions, or reported them too late," a spokeswoman for the public prosecution service said.

"Service providers such as banks have a legal obligation to protect society against abuse of the financial system for laundering criminal funds or financing terrorism," Marieke van der Molen told AFP.

She could not give further details but said "it was a wide-ranging investigation."

Last month the Dutch Central Bank (DNB) ordered ABN Amro to audit all five million of its private clients.

ABN Amro released an additional 114 million euros for this purpose, promising to "take all necessary measures to ensure full compliance with the legislation".

The latest investigation comes in the wake of a massive 775 million euros ($848 million) fine dished out to top Dutch bank ING last year over money laundering after it failed to ensure its accounts were not misused.

The scandal saw ING axe its chief financial officer Koos Timmermans after a two-year probe by Dutch authorities that found many white-collar crime suspects held accounts at the bank.

The case threatened to seriously damage ING's reputation and triggered calls for the resignation of its directors.

The Dutch state is still a majority stakeholder in ABN Amro after being bailed out following the 2008 banking crisis.

Dutch Finance Minister Wopke Hoekstra said government was "concerned" about the probe, but that it was in the hands of the public prosecution.

ABN Amro returned to Amsterdam's stock exchange's AEX index in 2015 in what was described as "one of the biggest IPOs by a European lender since the financial crisis".

The Netherlands' third-largest bank behind ING and Rabobank, ABN Amro traces its roots back to the 19th century.