Swedbank (SWEDa.ST) has canceled the severance pay of former CEO Birgitte Bonnesen on Monday after a report by its law firm said she failed to address deficiencies in the bank’s anti-money laundering controls during her years at the helm.
Shares in Sweden’s oldest retail bank lost a third of their value last year after the emergence of money-laundering breaches that prompted the dismissal of Bonnesen and much of the board.
After Sweden’s financial watchdog last week fined the bank a record 4 billion crowns ($385 million) over the breaches, Swedbank said on Monday that it will not dispute the fine.
“Given the information in the investigations conducted by the Swedish and Estonian financial supervisory authorities and … law firm Clifford Chance, the board of Swedbank has decided to unilaterally cancel the agreement of severance pay to the bank’s previous CEO Birgitte Bonnesen,” it said.
Bonnesen’s lawyer declined to offer immediate comment in response to Swedbank’s statement.
Swedbank Chairman Goran Persson said the fine would not affect the bank’s ability to pay its proposed shareholder payout for 2019, amounting to 8.80 Swedish crowns per share.
“The sanction that the FSA has delivered, and which the bank’s board has accepted, is not going to affect our ability to pay a dividend,” Persson told a news conference, adding that the bank’s annual general meeting will be postponed because of the coronavirus crisis.
Swedbank last week said that it was monitoring the situation would evaluate the effects of the virus before taking a final decision on the dividend.
Persson also said the bank remained committed to the Baltic countries despite the breaches reported from the bank’s operations there.
Swedbank’s subsidiaries in Estonia and Latvia actively pursued high-risk customers, some of whom had been rejected by another bank, the Clifford Chance report also said.
“Clifford Chance’s report confirms the bank’s failure. In its anti-money laundering work, the bank has not measured up to the requirements that customers, owners and society are entitled to set,” Persson said.
In January 2019 Bonnesen denied that the bank was involved in the money-laundering scandal emerging in the Baltic region and which also engulfed Danish rival Danske Bank (DANSKE.CO). However, was ousted in March, only an hour before Swedbank’s annual meeting, as investors lost faith in her handling of the crisis.
Swedish media have reported Bonnesen’s severance pay to be about 20 million crowns ($1.9 million). Swedbank did not immediately respond to a request to confirm the sums involved.
Bonnesen, who served as CEO for almost three years, headed-up the bank’s Baltic business between 2011 and 2014.
($1 = 0.9301 euros)
($1 = 10.3833 Swedish crowns)