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UPDATE 1-Norway's DNB down 5% after police start Namibia investigation

(Updates shares, adds background)

OSLO, Nov 29 (Reuters) - Shares of Norwegian bank DNB fell by 5.2% on Friday after police launched an investigation into the handling of payments from an Icelandic fisheries firm to Namibia.

Norway's white-collar crime unit late on Thursday said it would probe transactions made by fisheries company Samherji via DNB.

Samherji and DNB have both denied wrongdoing.

The investigation follows a report by Iceland's public broadcaster this month that said the Icelandic firm had made illicit payments worth millions of dollars to secure fishing quotas in Namibia.

The case has led to the arrest of Namibia's former justice minister and cast a shadow over the country's ruling party as it contests an election.

Long regarded as only a minor risk issue for Nordic banks, economic crime has become a major concern in the last two years following money laundering scandals at Danske Bank and Swedbank.

But while the shares of Danske and Swedbank have plunged since 2017, falling by 65% and 47% respectively, DNB has traded at near all-time high levels in recent months and is still only off 8% from a 2019 peak in late October.

The investigation is still in an early phase, the police said.

The International Monetary Fund will examine efforts by banks and regulators to stop money laundering in the Nordic and Baltic countries, Sweden's central bank said on Thursday.

DNB's shares were down 5% at 157.15 Norwegian crowns at 0839 GMT. (Reporting by Terje Solsvik; editing by David Evans and Jason Neely)