Swedbank in CEO battle amid dirty money scandal
The bank at the centre of Sweden's worst-ever money- laundering scandal may have limited options as it tries to find a new CEO.
Swedbank'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, which took more than seven months to replace CEO Thomas Borgen. The Danish lender at the centre of a $230bn laundering affair said last Friday it had finally settled on ABN Amro veteran Chris Vogelzang to take over.
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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," Mr 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 isn't something many candidates will jump at, said Mr 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, Mr 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."
Former Swedbank 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 $100bn 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.
Swedbank has announced plans for a new board. Its shareholders have called an EGM that's due to take place before June 21. To join the new board, they are proposing Josefin Lindstrand, an attorney who has worked on money-laundering issues, and Bo Magnusson, a veteran of Swedish bank SEB, which has so far largely escaped scandal.