Swedbank Hunts for CEO as Dirty Money Investigations Continue
Swedbank Hunts for CEO as Dirty Money Investigations Continue
(Bloomberg) -- As it tries to find a new chief executive officer, the bank at the center of Sweden’s worst ever money-laundering scandal may have limited options.
Swedbank AB’s “pool of candidates is pretty small,” said Matti Ahokas, head of equity research at Danske Bank in Finland.
He points to the example of Danske Bank A/S, which took more than seven months to replace its disgraced CEO, Thomas Borgen. The Danish lender at the center of a $230 billion laundering affair said on Friday it had finally settled on 56-year-old Dutchman and ABN Amro Group N.V. veteran, Chris Vogelzang, to take over. Danske’s original proposal for a new CEO, its head of wealth management, was rejected by the financial regulator late last year.
“As with the Danske case, it requires that you look a bit farther out, and that’s a big challenge at the moment,” Ahokas said. “I’m sure that Danske has gone through all the potential Nordic candidates, and I’m sure that Swedbank is doing the same.”
Running a bank is hard enough these days, given the additional regulatory requirements and new compliance standards. But taking on the top job in a firm that’s the target of multiple investigations in Europe and in the U.S. isn’t necessarily something many potential candidates will jump at, according to Ahokas. What’s more, Swedbank is Europe’s worst performing financial stock so far this year, having lost about a quarter of its value.
It “will be difficult” to find someone, Ahokas said. “We’re seeing margins pressed in many places, increasing compliance costs include anti-money laundering, and then the economy also seems not to be going at the same level it used to, and you still have negative rates. I would not be screaming to be a bank CEO.”
Swedbank’s former CEO, Birgitte Bonnesen, was fired in March amid allegations that she misled the public about the severity of the laundering scandal. Swedish media have reported that the bank may have handled more than $100 billion in potentially suspicious transactions.
Swedbank, which dominates financial markets in the Baltic region, has gone into damage-control mode. Former Swedish Prime Minister Goran Persson is set to become the next chairman, after the bank parted ways with Bonnesen supporter, Lars Idermark. On Monday, Swedbank announced plans for a new board.
Its shareholders have called an extraordinary general meeting that’s due to take place before June 21. To join the new board, they are proposing Josefin Lindstrand, an attorney who has worked internationally on money laundering issues, and Bo Magnusson, a veteran of Swedish bank SEB AB, which has so far largely escaped scandal. They will replace members who sat on the board while the money laundering allegedly took place, from 2010 to 2016. Board member Peter Norman won’t seek re-election after questions were raised about his ties to the financial regulator.
To contact the reporters on this story: Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net;Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net
To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net
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