18 Jul 2019
Swedbank AB acknowledged it will no longer be able to live up to its goal of paying out one of the highest dividend ratios in the Nordic finance industry.
Sweden’s oldest bank, which is dealing with the fallout of a money laundering scandal that has left it Europe’s worst performing financial stock this year, said it will now target paying out 50% of profits to shareholders, compared with 75% previously, according to a statement on Wednesday to the Stockholm exchange.
Aside from an overall stricter regulatory climate, Swedbank is facing “uncertainty” in relation to what it described as its “work on anti-money laundering.” Chairman Goran Persson, who started last month, promised shareholders that Swedbank will “continue to be a “well-capitalized, low risk bank” after implementing the new targets.
Sweden’s biggest mortgage bank this year became embroiled in a Baltic money laundering scandal that’s already cost the chief executive officer and chairman their jobs. Investigations are under way in Sweden, Estonia and the U.S. and investor concerns about potential fines have wiped out more than a quarter of Swedbank’s market value this year. That’s the worst performance of any major European bank over the period. The only lender that comes close is Danske Bank A/S, which is at the center of a $230 billion Estonian money laundering scandal.
By Frances Schwartzkopff, Bloomberg, 17 July 2019
Read more at Bloomberg
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet