New Swedbank CEO, Hired from Folksam, Criticized for Ties to Scandal-Hit Bank

By Veronica Ek, Hanna Hoikkala and | August 29, 2019

Sweden’s biggest shareholder group has criticized Swedbank AB’s choice of chief executive officer, arguing the board opted for an insider who failed to stop the bank sinking into a Baltic money-laundering scandal when he had the chance.

Jens Henriksson will take over as CEO of the Stockholm-based bank “as soon as possible,” according to a statement late on Wednesday. Swedbank has been run by its chief financial officer, Anders Karlsson, since Birgitte Bonnesen was fired in March amid concerns she misled the public about the severity of a dirty-money affair that triggered multiple investigations, including in the U.S.

Joacim Olsson, the CEO of the Swedish Shareholders’ Association, said Henriksson has a “long and impressive CV, but the wrong profile.”

Born in 1967, Henriksson comes from a position as CEO of Swedbank’s second-biggest shareholder, insurer Folksam. Since 2013, he’s also been on the nomination committee of the bank’s board. His appointment comes after investors voiced anger over Swedbank’s handling of the laundering scandal, including its apparent efforts to keep them in the dark, with some arguing that a new CEO must come from outside the lender’s ranks.

“The bank would have needed a person recruited externally,” Olsson said in a phone interview. As a representative of one of Swedbank’s biggest shareholders, Olsson said that Henriksson has had “influence over the appointment of a board that has had an inability to build structures to prevent money laundering.”

Olsson pointed to Henriksson’s ties to Swedbank and its current chairman, Goran Persson, whom Henriksson advised when they both worked at the finance ministry in the 1990s, as an example of his status as an insider. The head of the shareholders’ association also noted that Henriksson lacks the “thorough banking experience” that such a job requires.

Speaking to reporters in Stockholm on Thursday, 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.”

Shareholder Losses

Swedbank shareholders have seen the value of their investment plunge almost 40% this year amid allegations that the bank may have handled vast sums of dirty Russian money, and after its former CEO failed to keep shareholders informed of the developments.

After the news of Henriksson’s appointment, shares fell about 1% in Stockholm on Thursday. The bank is among this year’s worst performers in the Bloomberg index of European financial stocks.

‘Partly Responsible’

At investment broker Nordnet, adviser Frida Bratt said that Henriksson is “of course a very competent person with a solid experience. But that doesn’t automatically mean that he is the right person.” She pointed to his close attachment to the bank during the years when it is alleged to have potentially handled more than $100 billion in suspicious transactions tied to its Baltic operations.

“As a large owner that has been on the nomination committee,” Bratt said that Henriksson is “partly responsible for what happened within the bank.” She says that as the CEO of investor Folksam, Henriksson failed to ask difficult questions when he should have.

Henriksson’s career includes a stint at Swedbank as its global head of bank relations in 2010. Before that, he worked at the International Monetary Fund.

After the money-laundering allegations emerged, concerns were aired in national newspaper editorials that old friendships and former career ties may have shaped the way the Swedbank claims were handled by people at the nexus of power in finance, politics and regulation in a small nation of 10 million. For example, Henriksson has career connections with the head of the Swedish financial regulator and the head of another Swedbank shareholder, Alecta.

Persson, who took over as chairman this year after the laundering scandal led to the departure of his predecessor, praised the new CEO as an “experienced” leader. Henriksson, who worked as a top adviser to Persson when he was finance minister in the 1990s, brings with him “a strong communicative ability and a broad knowledge of the banking and financial industry,” the chairman said.

In Henriksson, Swedbank has found a CEO who has both “skill, experience and a strong moral compass, which is exactly what the bank needs right now,” according to Joakim Bornold, a savings adviser at Soderberg & Partners. This is a “very good decision.”

Folksam, of which Henriksson has been CEO since 2013, currently holds 7.1% of Swedbank. It beefed up its position in the bank during the global financial crisis a decade ago, when Swedbank suffered heavy losses due to credit impairments in the Baltic countries.

–With assistance from Rafaela Lindeberg.


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