S&P puts Swedbank on negative watch

S&P said it placed the AA- long-term and A-1+ short-term issuer credit ratings on Swedbank AB and its core subsidiary Swedbank Mortgage AB on CreditWatch with negative implications, along with the group's outstanding debt.

The agency said it intends to resolve the CreditWatch within three months.

The outcome will depend on the bank's ability to stabilize its franchise and the effect of the ongoing investigations on its business and financial profiles, S&P said.

The CreditWatch follows the recent money-laundering allegations and subsequent regulatory investigations in Sweden and Estonia, which are viewed are as undermining the bank's reputation and might weigh negatively on its creditworthiness.

The Swedish broadcaster SVT has presented information linking Swedbank to Danske Bank's alleged money-laundering case in Estonia, S&P explained.

SVT also alleged that the bank might have misled the U.S. authorities in connection with the Panama Papers investigations, the agency said.

Management reaction to the flow of negative news has proven insufficient to clear these allegations and has failed to preserve its reputation and reassure investors, S&P added.

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