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Swedbank CEO defends client privacy amid dirty-money probes
[STOCKHOLM] The new chief executive officer of Swedbank says he's all for transparency, after his predecessor misled the public about money laundering and was fired. But he also made clear he won't do anything to diminish client privacy.
Jens Henriksson, the 52-year-old chosen by Swedbank's board to steer it through multiple probes into allegations it handled more than US$100 billion in potentially suspicious transactions, says transparency is a goal, but "within the existing restrictions."
"The situation is such that Swedbank operates in a number of jurisdictions and there exist very strict rules on what you can and can't say," Mr Henriksson, who runs Swedbank's second-biggest shareholder, Folksam, said in an interview in Stockholm on Thursday. He acknowledged that these restrictions on transparency might cause "irritation" in some quarters, which he said he understands.
"But at the same time, as a bank, you have such a unique insight into people's most private financial affairs," he said. "Customers and companies need to be able to trust that we won't share that."
Mr Henriksson will start as CEO "as soon as possible", the bank said late on Wednesday. Swedbank has been run by its finance chief, Anders Karlsson, who took on the job in March after Birgitte Bonnesen was fired.
For Swedbank, 2019 has turned into an annus horribilis. After repeatedly denying any involvement in money laundering, it was forced to backtrack earlier this year when Sweden's main broadcaster published a series of reports tying the bank to a vast network of dirty-money transactions stemming from the former Soviet Union. That prompted authorities in Sweden, Estonia and the US to start formal investigations into the bank. Investors have dumped its shares, and Swedbank is down almost 40 per cent this year.
Individuals who reportedly benefited from Swedbank's accounts include deposed Ukrainian President Viktor Yanukovych and convicted felon Paul Manafort, who was the chairman of Donald Trump's US presidential campaign. Danish media on Friday reported that Mr Yanukovych also made use of accounts at the Estonian unit of Danske Bank.
One of the key points of criticism among shareholders was Swedbank's lack of transparency in its handling of the allegations against it. After initially denying everything, the bank published a redacted report on the accusations that contained no figures and very few details.
Ms Bonnesen then hired Ernst & Young to help Swedbank compile a new report, but was soon forced to rethink that choice after realising the accounting firm was itself being investigated in Denmark for failing to identify suspicious transactions in a much bigger money laundering scandal at Danske Bank.
Swedbank's overall approach angered many shareholders, making it impossible for Ms Bonnesen, who frequently cited client privacy considerations, to continue as CEO. Mr Henriksson now needs to reassure investors and the general public that he's learned from those experiences. He declined to make any judgments on Swedbank's past errors. "I can only say I will do everything I can to be as transparent as possible," he said.
For now, the reaction from stakeholders has been mixed. Joakim Bornold, a savings adviser at Soderberg & Partners, says that Swedbank has found a CEO who has both "skill, experience and a strong moral compass, which is exactly what the bank needs right now".
But others disagree. Joacim Olsson, the CEO of the Swedish Shareholders' Association, said Mr Henriksson has a "long and impressive CV, but the wrong profile".
Aside from being the CEO of Swedbank shareholder Folksam, Mr Henriksson has since 2013 been on the nomination committee of the bank's board. He also has career connections with the head of the Swedish financial regulator and the head of another Swedbank shareholder, Alecta. He served as adviser to the bank's new chairman, Goran Persson, when both worked at the finance ministry in the 1990s.
"The bank would have needed a person recruited externally," Olsson said. As a representative of one of Swedbank's biggest shareholders, Mr Olsson said that Mr Henriksson has had "influence over the appointment of a board that has had an inability to build structures to prevent money laundering".
Speaking to reporters in Stockholm on Thursday, Mr Persson acknowledged that Swedbank's "reputation right now isn't exactly the best". The people running the bank are "struggling with the issue of money laundering and need to take the situation extremely seriously."
Mr Henriksson says that his success as the CEO of Swedbank depends on making sure all its stakeholders are looked after.
"It's basically about doing two things at once," he said. "It's about working with, meeting the customer on a daily basis, keeping innovating, keep being agile, working with partners."
"The reputation of Swedbank has been damaged by what has happened," Mr Henriksson said. "At the same time I think that sometimes one needs to separate the image of Swedbank up there and Swedbank in the daily life."