Moody's lowers Swedbank view to negative

Moody's Investors Service said it affirmed all of the ratings on Swedbank AB, including its long-term deposit and senior unsecured debt ratings of Aa2.

The agency also said it revised the outlook on Swedbank's long-term deposit, senior unsecured debt and long-term issuer ratings to negative from stable.

The outlook revision follows the sequence of events around alleged money laundering, and governance issues that resulted in the Swedish Economic Crime Authority (SECA) undertaking preliminary investigations, including into whether the bank had mislead the public and markets regarding the occurrence of money laundering in the bank's Baltic operations, Moody's explained.

The sequence of events also led to the departure of its previous president and chief executive officer, the agency said.

The ratings reflect the strength and expected resilience of Swedbank's franchise and financial profile, strong asset quality, capitalization and profitability, Moody's said.

The ratings also consider that the bank has already taken steps to tighten internal control functions and address any money laundering failures, the agency said.

The negative outlook reflects potential reputational and financial risks that may arise from potential investigations and regulatory penalties, Moody's said.

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