STOCKHOLM (Reuters) - Swedish lender Swedbank (ST:SWEDa) on Monday cancelled severance pay of its ex-CEO Birgitte Bonnesen 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.
Sweden's oldest retail bank saw its share price fall by a third last year after details of the scandal - which also engulfed Danish peer Danske Bank (CO:DANSKE) - emerged and prompted it to fire Bonnesen and much of its board.
Last week, Sweden's FSA fined Swedbank a record 4 billion crowns ($385 million) over breaches in its anti-money laundering work. Swedbank said on Monday it will not dispute the FSA's 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," the bank said in a statement.
Bonnesen's lawyer declined to offer an immediate comment to Swedbank's statement.
Swedbank's subsidiaries in Estonia and Latvia actively pursued high-risk customers some of whom had been rejected by another bank, the report by law firm Clifford Chance into the Swedish bank's anti-money laundering work 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," Swedbank chairman and former Swedish prime minister, Goran Persson said.
In January 2019, Bonnesen denied the bank was involved in the money laundering scandal emerging in the Baltic region. Yet, she 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 around 20 million crowns ($1.93 million). Swedbank did not immediately respond to a request to confirm that sums involved.
The Clifford Chance report showed that during the 2014-2019 period transactions representing a high risk for money laundering were made in the form of payments to customer accounts worth 17.8 billion euros ($19.14 billion) and payments from customer accounts worth 18.9 billion euros in the Baltic subsidiaries.
Bonnesen, who served as CEO for almost three years, headed-up the bank's Baltic business between 2011 and 2014.
