Research Update: Swedbank AB Ratings Off CreditWatch; Outlook Negative While Investigations Continue

Various authorities and regulators continue to investigate Swedbank AB, since early this year, on alleged anti-money-laundering allegations. Specifically, the first report on the investigation by the Swedish FSA has been postponed to early next year from October 2019. Recently, the bank replaced part of its top management and board of directors, and stabilized the franchise and market confidence; however, ongoing investigations could still highlight serious deficiencies in the bank's control and governance, resulting in heavy fines and reputational damages. We are affirming our 'AA-/A-1+' long and short-term ratings on Swedbank and subsidiary Swedbank Mortgage AB, and removing the ratings from CreditWatch with negative implications. The negative outlook reflects the possibility of us lowering the ratings over the next 6-12 months

...- Various authorities and regulators continue to investigate Swedbank AB, since early this year, on alleged anti-money-laundering allegations. - Specifically, the first report on the investigation by the Swedish FSA has been postponed to early next year from October 2019. - Recently, the bank replaced part of its top management and board of directors, and stabilized the franchise and market confidence; however, ongoing investigations could still highlight serious deficiencies in the bank's control and governance, resulting in heavy fines and reputational damages. - We are affirming our '##-/A-1+' long and short-term ratings on Swedbank and subsidiary Swedbank Mortgage AB, and removing the ratings from CreditWatch with negative implications. - The negative outlook reflects the possibility of us lowering the ratings over the next 6-12 months if the investigations negatively affect our view of the bank's risk control, governance, or franchise; or weaken its financial risk profile....

Research Update