STOCKHOLM (Reuters) – Swedbank Chairman Lars Idermark has quit only a week after the lender’s chief executive was ousted over her handling of a money laundering scandal, saying the controversy threatened to distract from his role as head of forestry group Sodra.
FILE PHOTO: Swedbank Acting CEO Anders Karlsson and Chairman of the Board Lars Idermark attend a news conference in Stockholm, Sweden March 28, 2019. REUTERS/Johan Ahlander/File Photo
The bank, Sweden’s biggest mortgage lender, had fired its CEO Birgitte Bonnesen last week only an hour before a heated annual shareholder meeting marked by disgruntled investors rounding on her handling of the money laundering allegations.
Allegations against Swedbank, largely reported by Swedish TV, have linked it to a scandal at Danske Bank, which faces potential lawsuits, fines and sanctions after admitting last year that 200 billion euros ($225 billion) of suspicious payments had flowed through its Estonian branch between 2007 and 2015.
“Following recent strong debate about Swedbank and questions about the bank’s control of suspicious money laundering in the Baltics, I have concluded that the media attention is not compatible with my CEO role at Sodra,” Idermark said in a statement on Friday.
“Therefore, I have decided that the best alternative is to leave the position as chair of Swedbank with immediate effect.”
In connection with last week’s meeting, where many investors were vocal in their criticism of the bank’s management, third-largest shareholder Alecta had warned it could demand further dismissals if the board did not take immediate action to restore confidence in the bank.
“It’s a welcomed and expected decision, but it’s shouldn’t have taken so long; it would have been better if he resigned before the AGM,” Swedish Shareholders’ Association chief Joacim Olsson told Reuters.
Olsson called on the bank to put all cards on the table, including internal investigations into its dealings in the Baltics.
Alecta on Friday said that the Swedbank nomination committee should continue to strengthen the board.
“They need to be thorough, but it shouldn’t take too long,” an Alecta spokesman said.
Both Bonnesen and Idermark had been under fire for the bank’s communications and how they have handled the allegations, which have sparked a four-way investigation by regulatory authorities in Sweden, Estonia, Latvia and Lithuania. Swedbank shares, meanwhile, have lost about a third of their value.
The shares were unchanged at 146.50 Swedish crowns by 0805 GMT on Friday, having recovered from a seven-year low of 127.2 crowns set on March 29 when the departure of its CEO was announced.
The committee in charge of the bank’s executive appointments said it would intensify work on strengthening the board, including finding a new chairman. The board said it would call a special shareholder meeting to confirm any appointment.
($1 = 0.8908 euros)
Reporting by Helena Soderpalm and Johannes Hellstrom; Additional reporting by Johan Ahlander; Editing by David Holmes and David Goodman