Swedbank CEO and CFO suspended amid internal probe

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Robert Kitt.
Robert Kitt. Source: Priit Mürk/ERR

Swedbank board chair and CEO Robert Kitt has been suspended from his position, Baltic News Service reports.

The decision, which takes immediate effect, was made by the supervisory board, with Swedbank CFO Vaiko Tammeväli joining Kitt in suspension.

Swedbank says the suspensions result from an ongoing internal investigation.

"We are fully committed to the Estonian market and to all our employees, customers and other stakeholders," said Charlotte Elsnitz, head of Baltic banking at Swedbank and chair of the banks' supervisory board, BNS reports.

"Estonia is one of four home markets for Swedbank. We will continue developing Estonia's leading bank with society and customers in focus," she continued.

"As previously communicated, Swedbank has initiated an in-depth internal investigation, with the help of external resources, to investigate historical Anti-Money Laundering (AML) compliance, and Swedbank will continuously act upon the conclusions of these investigations. In addition, Swedbank is fully cooperating with the authorities in Sweden, the U.S. and the Baltic countries in their respective investigations," Elsnitz added.

In late March, Swedish public broadcaster SVT obtained an internal report conducted by Swedbank which stated that within a 10 year period, around €135 billion in high-risk money moved through the bank's Estonian branch.

The time period roughly coincided with the €160 billion in potentially illicit funds thought to have passed through Danske Estonia, which is to shut its doors this year, between 2007 and 2015.

According to both Reuters and the Financial Times, the Swedbank money chiefly originated from the bank's customers in Russia.

At the beginning of April, British-American investor Bill Browder, heavily involved in whistle-blowing on the Danske case, filed a criminal report with both the prosecutor's office and the Financial Intelligence Unit (FIU) of the Police and Border Guard Board (PPA), concerning the Estonian Swedbank branch.

Priit Perens has also been suspended from Swedbank's supervisory board and will end his employment with the bank, it announced Monday evening.

The supervisory board has elected Olavi Lepp, currently chief risk officer, as acting chairman of the management board and acting CEO of Swedbank Estonia, with Anna Kouts, currently head of treasury, as acting CFO and acting member of the management board. Both these appointments are subject to approval from the competent authorities, according to BNS.

Swedbank press conference

Charlotte Elsnitz appeared at a press conference at 10.30 Tuesday, together with the new temporary employees, Olavi Lepp and Anna Kouts.

Elsnitz was not able to add much to what had already been reported in the media on the case, repeatedly stressing that the investigation was ongoing and so she was not able to comment on its outcome, any wrongdoing on the part of Kitt and Tammeväli, or the duration of the investigation.

She noted that while Kitt and Tammeväli were still employees of Swedbank, they would not be attending work on a day-to-day basis.

She also said that the investigation so far as Swedbank went was being conducted at an Estonian level rather than by head office in Sweden, noting that the supervisory authorities of both countries had already been conducting their own external investigations.

Elsnitz also expressed her gratitude in Lepp and Kouts taking on the temporary roles at short notice, and her confidence in their ability to do a good job.

She added that of paramount importance in maintaining Swedbank customer and employee morale, as well as the image and reputation of the bank, was to continue developing the best products and services for customers in maintaining its position as a leading bank in Estonia.

A "town hall" meeting had been held to keep Swedbank employees up-to-date on the issue, simultaneous with the information being made public via the press release on Monday, as per regulations for a listed company.

Olavi Lepp stressed the strong financial results the bank had published for Q1 2019, noting that the Q2 report would be available soon, with Anna Kouts reiterating the strong financial position of the bank notwithstanding the current investigation.

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Editor: Andrew Whyte

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