Swedbank noted that many of the key observations made by the two financial supervisory authorities correspond to the bank' own conclusions.

"In the past, the bank has not allocated sufficient resources and competence to adequately manage the risk of money laundering by clients and third parties," Swedbank said. "The division of responsibilities within the bank has not been clear enough, and the bank has not always complied with internal policies. Know Your Customer and risk assessment are areas where Swedbank has had, and still has, shortcomings. This applies both to the Swedish and Estonian operations."

In later years, the bank has continuously improved its system support processes and routines, the bank noted, noting that it has also terminated relations with clients who do not meet regulatory requirements or bank policies.

Nevertheless, it continued, the bank's anti-money laundering work has had, and still has, certain shortcomings.

Internal investigation, new unit launched

"Based on these insights, Swedbank is currently hard at work to ensure regulatory compliance going forward," Swedbank said. "This February, international law firm Clifford Chance was retained to conduct an internal investigation into historical shortcomings at the bank. This investigation is expected to be concluded in early 2020."

Clifford Chance will also provide recommendations to ensure that Swedbank meets industry best practices and regulatory expectations.

Within the scope of the bank's new Anti-Financial Crime (AFC) unit, work has been ongoing since April to identify historical shortcomings as well as to develop the bank's ability to prevent all types of financial crime. The bank will provide information regarding its efforts to combat money laundering and other types of financial crime in connection with its next interim report on Oct. 23.

Swedbank also announced that its board of directors has decided to meet a request by theSwedish Economic Crime Authority to waive attorney-client privilege regarding attorney Erling Grimstad's assignments for Swedbank.

The board of directors has also appointed Ingrid Harbo permanent chief compliance officer (CCO). Harbo will continue to be co-opted to the Group Executive Committee.

Swedish public broadcaster SVT reported in February that at least 40 billion Swedish kronor (approximately €3.8 billion) of suspicious money moved between accounts at Swedbank and the Estonian branch of Danske Bank.

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