(Bloomberg Opinion) -- Hours after firing his CEO, Swedbank AB Chairman Lars Idermark faced the awkward task of addressing shareholders at the annual general meeting. Amid calls to postpone the gathering in light of the dramatic turn of events, he apologized for the way Sweden’s oldest bank had handled allegations of money laundering.
A sense of urgency is what the lender needs. The board will need to show more than just regret over coming days if it is to arrest the deterioration of trust. The loss of almost a third of the lender’s market value in weeks should be more than sufficient a warning that Swedbank has taken too long to prove its commitment to transparency and management accountability.
Since February, a picture has emerged of a lender channeling billions of dollars in laundered Russian funds through its Baltic operations. How much we simply don’t know yet.
A review by an external forensic accounting firm commissioned by Swedbank was rushed and only partial. The lender said it considered the matter closed and didn’t plan further disclosures. But allegations have since emerged that the amounts could be in the tens of billions of dollars a year — many times what was investigated.
The company has left itself exposed to suggestions that it has sought to play down, if not cover up, some of the allegations.
Regulators in Sweden have started an insider trading probe after the bank informed some shareholders of the money laundering allegations before they were first broadcast. Separately, U.S. authorities are reportedly investigating whether Swedbank provided misleading information relating to the so-called Panama Papers.
Swedbank doesn’t recognize itself in the picture that has been painted, Idermark said on Thursday. That will be of no comfort for stakeholders who almost every day over the past two months hear of yet more intrigue. Expect reporters and enforcers to keep digging. The bank needs to show it is getting ahead of that.
It could start by acknowledging what it still needs to find out, and the providing a comprehensive analysis of what it knows about the suspicious funds that flowed through it. Outgoing CEO Birgitte Bonnesen’s claim that “we’ve checked for everything,” clearly hasn’t stacked up.
It’s all the more surprising that Swedbank’s handling was so inadequate given what it saw happen to Danske Bank A/S. After the Danish bank muddled through its own money laundering claims, the shares tanked and the lender ended up replacing the chairman. It’s also still seeking a CEO. Now there will be even more competition to fill a tough role.
Money laundering doesn’t only affect the banking industry and the bank can’t therefore fight it alone, Swedbank’s acting CEO Anders Karlsson told shareholders. Providing a full account of the firm’s own actions and an assessment of its current systems and controls would be a start.
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net
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Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.
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