Pressure grows on Swedbank directors in wake of money laundering allegations

Jonathan Boyd
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Pressure grows on Swedbank directors in wake of money laundering allegations

Two of Sweden's biggest providers of occupational pensions, Alecta and AMF, have issued statements ahead of Swedbank's annual general meeting on 28 March, calling for significant changes to the board in the wake of the ongoing money laundering scandal that has rocked the bank.

On 26 March, the bank's Nomination Committee stated that it was proposing the election of Kerstin Hermansson as a board member to help it deal with "regulatory compliance and securities issues."

"Kerstin Hermansson is the former CEO of the Swedish Securities Dealers Association (Svenska Fondhandlarföreningen), and has participated as an expert in several investigations commissioned by the government regarding the regulation framework for the securities market," Swedbank said in a statement.

"She has closely monitored the regulatory development in the EU over the past 10 years, with a focus on the securities market. She has also been active in the European Banking Federation and ESMA's (European Securities and Market Authority) Securities and Markets Stakeholder Group, and is a board member of SwedSec Licensing AB and the Seventh AP Fund. She holds a law degree from the Lund University."

Magnus Billing, chief executive of Alecta - which says it manages the pensions of some 2.4 million people and 34,000 businesses in Sweden, and holds 4.85% of Swedbank equity according to data to 28 February 2019 - said in a statement: "We are not satisfied with the board's handling of the money laundering issue."

"Trust in the bank is damaged and therefore the Nomination Committee has started work to strengthen the board. This can be done in several ways. Proposing Kerstin Hermansson is a first step."

"Nomination Committee work takes time if it is to be done well. We want the work to strengthen the board to be done as quickly as possible, but it should be done properly. It is important that the work is not rushed through."

"One of the things the board must address immediately is to ensure increased transparency around the the money laundering issue."

AMF - which claims some 4 million customers and assets under management of some SEK590bn (€57bn) and which owns some 4.4% of Swedbank shares - put out its own statement from chief executive Johan Sidenmark.

"The recent allegations about money laundering have damanged trust in Swedbank and thereby our savers. We are not pleased with the measures that have hitherto been implemented to handle the situation, or the accounting for and communication we have seen around the issue."

"We expect the bank's board and management to engage with all their might and as a highest priority in the work to rebuild trust in the bank. We will continue to push for this process to be pursued in as open and broad a way as possible."

"The work to increase trust must be long term and we understand that it cannot be done in an instant, even if we naturally would like to see it done as quickly as possible. We have therefore agreed that the Nomination Committee should continue its work through the spring to strengthen the bank's board, in order to raise trust in the bank."

The 10 largest shareholders A-shares Holdings %
Sparbanksgruppen 121 205 430 10.71
Folksam 78 882 731 6.97
Alecta Pensionsförsäkring 54 819 300 4.84
Swedbank Robur fonder 53 081 849 4.69
AMF Försäkring & Fonder 50 301 676 4.44
Sparbanksstiftelser - ej Sparbanksgruppen 38 349 432 3.39
BlackRock 29 510 257 2.61
Vanguard 29 395 490 2.60
Norges Bank 24 478 348 2.16
Fidelity Investments (FMR) 20 161 264 1.78
10 largest shareholders 495 878 121 43.81
Total 1 132 005 772  
Number of shareholders   326 114

Source: Swedbank, data to 28 February 2019

 

Jonathan Boyd
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Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.