By Esha Vaish
STOCKHOLM (Reuters) – Swedish bank SEB’s fund management arm has cut its stake in rival Swedbank by just over half, citing risks Sweden’s biggest mortgage lender faces due to its alleged involvement in a fast-growing Baltic money laundering scandal.
Swedbank has come under heavy criticism from politicians, investors and the general public over allegations that its Baltic operations processed billions of dollars of transactions linked to Russian money laundering.
The scandal, which broke on Feb. 20, has led to Swedbank’s CEO and chairman leaving and the launch of several regulatory investigations into the bank.
SEB Fonder has reduced its Swedbank stake to just under 1 percent from just over 2 percent over the past two months, having sold nearly 5 million shares in March and over 7 million shares in February, according to the company and based on data published on Tuesday.
Before the cut, SEB was Swedbank’s 10th largest shareholder according to Refinitiv Eikon data.
“The decision to reduce ownership in Swedbank is a management decision, based on the information that is gradually published about Swedbank,” SEB Investment Management’s head Hans Ek told Reuters by email.
He added that SEB had drawn parallels with respect to price developments with other companies suspected of lacking in money laundering controls.
Swedbank shares have fallen by one third as the scandal has grown, with the latest report suggesting its Estonian accounts dealt with roughly 135 billion euros (116.32 billion pounds) of suspicious cash, predominantly from Russian clients.
(Reporting by Esha Vaish in Stockholm, additional reporting by Johan Ahlander; editing by David Evans)