Is Sweden’s big bank heading for more trouble?

Swedbank is one of Sweden’s biggest banks – it is a big retail bank for ordinary folk and SME’s through its own branch network and through cooperation with the Swedish savings banks. Its biggest owner are the saving banks and Folksam, which is another Swedish financial giant involved in pensions and insurance. 

Swedbank, the Saving Banks and Folksam all have the same historical roots that are intertwined with the Social Democrats and the cooperative movement.

Swedbank has seen plenty of big scandals the last 20 years with horrible losses in Ukraine, huge banking losses in the Baltics after the 2007/08 financial crisis, followed by money laundering activities from their Baltic offices. In 2015 and 2018, two CEO’s were forced to leave the bank – the first because there were allegations that senior staff were involved in unauthorised investments and the second for money laundering allegations.

 Swedbank is big with some €170 billion in total assets and according to their website:

“We are a full-service bank. In our four home markets we offer you services such as loans and mortgages, savings and investments, payment services, pension and insurance, and private banking. Our subsidiary in Luxembourg provides you with fund services and also with foreign mortgages in France, Spain and Portugal via the Swedish Swedbank branches. We also have international branches in China, Denmark, Finland, Norway and the US, offering a wide variety of services to meet your banking needs. We also have a representative office in South Africa which facilitates relationships with local banks and organisations across the African economies.”

Given the above and its chequered history the last 20 years you would think that they would appoint seasoned bankers to run the shop, but no, they have appointed a former Social Democrat Prime Minister as Chairman and another Social Democrat activist colleague as CEO who has spent the last decade watching over Swedbank on behalf of Folksam! That is hardly a ringing story on his CV…

Both men are serious and conscientious people but neither of them has held a senior post in a bank…

… and banking today is at a turning point where financial and technological risks have grown, where markets are global and where complexity is found in every office. This is no market for the uninitiated, and politicians seldom make good bankers.

Photos: Swedbank and Folksam

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