Swedbank AB (publ) (SWEDA) Earnings Call Transcript & Summary

Good morning, and welcome to this webcast where Clifford Chance will present their report on Swedbank. Due to the corona situation, this is a press conference that will be conducted from the Swedbank headquarter here in Sundbyberg and on a transatlantic link in Washington, D.C. from the Clifford Chance office. We will make sure to follow all the recommendations put out by the authorities regarding the corona situation. And therefore, Mr. Göran Persson, Chairman of the Board of Swedbank, will be part of this press conference via telephone. Representing Swedbank here in Sundbyberg will be our President and CEO, Mr. Jens Henriksson. And of course, in the room, we have representatives from media gathered. Now these are very special circumstances. We are doing our utmost to honor the restrictions and recommendations from the authorities. The full program of the press conference looks like this: one presentation from Clifford Chance via web link followed by questions from the reporters; then, we close down the web link, and we open up for presentations by the Chairman of the Board and the CEO of Swedbank here in Sweden, followed by questions; then, we will finally close with questions to our CEO outside this room on one-on-ones. So regarding the fact that Mr. Göran Persson is not in the room, we will open up a teleconference with him after these sessions. We will be speaking English for the majority part of this press conference. However, the presentations of Mr. Persson and -- I'm sorry, after the presentations of Mr. Persson and Mr. Henriksson, we will move on to Swedish. So let's connect with Washington, D.C.; and Mr. David DiBari at Clifford Chance.

Good morning from Washington, D.C. My name is David DiBari. I am the co-Head of Clifford Chance's Global Risk Team, Head of our Litigation Department in the Americas and Managing Partner of our Washington office. For more than 30 years, I've conducted and led multi-jurisdictional investigations for U.S., European and Asian companies relating to financial economic crime. Clifford Chance is a global law firm with 35 offices across 23 countries, with over 3,500 lawyers and other professionals servicing clients across all sectors of the global economy. We work with a wide range of global institutions and regulators across the financial sector, including most of the world's largest financial institutions. It has been my privilege over the last year to lead our firm's investigation of Swedbank, which is the subject of today's discussion. My team included several former U.S. Department of Justice and U.S. regulator officials and lawyers from Clifford Chance offices throughout Europe. We were supported primarily by FTI Consulting, which provided scores of forensic accountants experienced in these types of investigations. First, let me say that I'm disappointed not to be there with you today in person due to the traveler restrictions and in these very challenging times. Today, Swedbank publicly released Clifford Chance's investigation report, which presents the results of the investigation that we have undertaken on behalf of Swedbank and at the instruction of the board. I am here today to outline the key findings of our year-long investigation, as are set forth in much more detail among the 200 pages of the report. Let me start by providing a little bit of background. As many of you know, Swedbank is a Stockholm-headquartered bank publicly traded on Nasdaq Stockholm and operates in 4 home markets: Sweden and the 3 Baltic markets of Estonia, Latvia and Lithuania. The bank has 3 primary business lines: Large Corporates & Institutions, known as LC&I; Swedish Banking and Baltic Banking. Swedbank also maintains several international branches, including one in New York. It is one of the oldest financial institutions in Sweden and through its predecessor entities, has been in existence for 200 years. Swedbank began in the savings bank movement and continues to embody the fundamental savings bank ideology, but it is now a major bank playing an important role in the communities that it serves. The bank has more than 7.3 million private customers, 620,000 corporate customers and more than 15,000 employees worldwide. On 20 Feb, 2019, SVT began a series of broadcasts, alleging that customers at Swedbank's Baltic subsidiaries had engaged in suspicious transactions indicative of money laundering. Subsequently, the Swedish Financial Supervisory Authority and the Estonian Financial Supervisory Authority announced investigations into the allegations. Following the first SVT program, Swedbank engaged Clifford Chance to conduct an investigation into the allegations and more broadly, into Swedbank's historical exposure to money laundering risk reaching back more than 12 years to 2007. The investigation focused on the areas of the bank that, based on the available information, showed the highest historical AML-related risk. The scope and focus of the investigation was informed by the media allegations regarding Swedbank, the pending investigations by Swedish Baltic and U.S. authorities, Swedbank's own prior internal reviews that had identified historical issues and on information identified through our analysis of historical internal documents and communications, customer and transaction records and interviews of current and former employees at every level of the institution. Over the course of the 12-year review period, AML regulations, their interpretation and application among international banks operating in Europe as well as industry standards based on common practices, official guidance and past enforcement actions have evolved, with regulatory expectations increasing over time. It is important to understand the facts discussed against this backdrop rather than solely through today's lens and with the benefit of hindsight. It is important to add that as Clifford Chance has conducted its investigation, Swedbank has been cooperating with ongoing government investigations in Sweden, the Baltics and in the United States. As you know, the results of the Swedish and Estonian regulatory investigations were announced late last week. Throughout the investigation, Clifford Chance has provided regular reports on progress to the Swedbank Board of Directors and has prepared this report to the board, setting forth our factual findings. The findings of this report are Clifford Chance's objective conclusions. The bank has not influenced the course of the investigation or Clifford Chance's conclusions and has cooperated fully in the investigation. The board has been clear that it wanted a thorough and objective investigation. That is what we have delivered. Let me now give you a sense of the complexity and the extent of the investigation. Drawing on our experience and expertise, Clifford Chance designed the investigation to identify any historical deficiencies in Swedbank's AML compliance systems and controls during the relevant 12-year review period. During the course of the investigation, we identified deficiencies also in the historical OFAC sanctions controls and at the Board's direction, the investigation was expanded to cover historical OFAC sanctions compliance as well. The investigation focused primarily, but not exclusively, on the bank's 3 Baltic subsidiaries, which the available information indicated presented the potential for the greatest exposure to AML and to OFAC risks. As evidenced by the report, the investigation was extensive and intensive. Clifford Chance was granted unrestricted access by Swedbank to the relevant records, which encompass literally billions of transaction records, approximately 160 million customer records, over 38 terabytes of electronic and scanned hard copy data from Swedbank's internal files, including over 20 million documents gathered from e-mail servers, employee laptops, mobile devices, shared file servers, customer due diligence materials, internal audit reports and Board and key committee minutes and supporting documentation. Clifford Chance assembled a dedicated and multilingual review team as the relevant documents were not only in Swedish, but also Estonian, Latvian, Lithuanian, Russian, Ukrainian, among other languages. Clifford Chance also conducted nearly 100 interviews of 81 different individuals, including current and former employees, managers and senior executives, current and former board members and an external counsel. Steps were taken to ensure compliance with applicable data privacy and bank secrecy requirements, and while the manner in which certain facts and findings are discussed in the report has been impacted by these laws and regulations, in our view, the detailed text provides a clear picture of what happened, how it happened and the accountability of those involved. As is set forth in detail in the report, Clifford Chance did not conclude that Swedbank, in itself, engaged in money laundering. However, the investigation indicated that throughout the 2007 to 2019 review period and to varying degrees across LC&I, Swedish Banking and Baltic Banking, Swedbank had inadequate systems and controls to properly manage the AML and economic sanctions risk of its customer base. This exposed Swedbank and the Baltic subsidiaries to significant AML and sanctions risk. This risk appeared most prevalent in the Baltic subsidiaries, primarily at Swedbank Estonia, and principally arose from the high-risk nonresident or HRNR business. From before 2007 and until a decision to derisk the HRNR business in 2016, Swedbank Estonia and Swedbank Latvia actively pursued these high-risk customers as a business strategy. Swedbank Estonia also accepted certain customers that had been offboarded by another bank in Estonia in 2015 that had decided to exit the HRNR business based on excessive money laundering risk. The investigation found that, at times, the HRNR customer review committees, in particularly at Swedbank Estonia, approved accepting these high-risk customers without having complete documentation regarding the ultimate beneficial owners, proof of source of funds or explanation of the legitimate business purpose of the customers and did not address red flags that arose from the information that was provided. Some of these companies, approved as customers, had complex and opaque ownership structures, involving offshore entities organized in low tax jurisdictions as well as ownership through foreign trusts and similar vehicles for which the beneficial owners were difficult to verify. Swedbank Estonia also accepted customers despite awareness amongst employees, including relationship managers, that the listed beneficial owners were not the actual beneficial owners and in situations in which the prospective customer refused to provide verifiable, beneficial ownership information. Swedbank Estonia's also accepted customer corporate structures, knowing that they were designed to conceal the true beneficial owners from home country tax jurisdictions and authorities. In addition, at Swedbank Estonia, employees involved in the HRNR business kept certain information regarding the beneficial owners for some customers outside of Swedbank's regular customer databases and retained the information in hard copy in a safe or locked drawer to assuage the customers' concern that the true beneficial owners may become known to third parties. Lastly, Swedbank Estonia employees also repeatedly overlooked or disregarded indications of potentially suspicious transactions. Some of these practices were also identified in the other Baltic subsidiaries. And these AML deficiencies were not limited to the Baltic subsidiaries as certain of a high-risk customers that bank primarily in the Baltics also were permitted to open and to maintain accounts with Swedbank LC&I and with Swedish Banking. As part of the investigation, Clifford Chance and FTI analyzed, on a risk basis, billions of transactions by customers at each of Swedbank's Baltic subsidiaries. Significantly, this included not just those customers in the HRNR customer segment, but a much broader review of customers in their activity that carried AML risk identified through the investigation and the forensic work of FTI. To assess the AML risk, FTI ran a series of 21 different AML detection scenarios across the transaction data designed to identify transactions that raised AML risk. A hit against 1 or more of the 21 detection scenarios does not mean that the transaction ultimately would lead to a report to the government financial intelligence unit. In fact, industry standards for AML transaction monitoring systems, which deploy similar detection scenarios, indicate that less than 10% of alerted transactions ultimately result in a suspicious activity report filing. Nonetheless, this analysis of the transactions that hit against the detection scenarios provides an important insight into the degree of AML risk presented by the historical customer base at each of the Baltic banks. Our methodology is detailed in the report. But in general, we focused on those transactions that alerted on 3 or more of the 21 detection scenarios. The results, which represent based on the aggregate value of transactions identified that were received into accounts at the bank and the amount of the outgoing payments from those accounts, are as follows for each subsidiary: for Swedbank Estonia, we identified approximately EUR 9.9 billion in incoming payments and EUR 11.4 billion in outgoing; for Swedbank Latvia, approximately EUR 4.8 billion incoming and approximately EUR 4.5 billion outgoing; and for Swedbank Lithuania, approximately EUR 3.2 billion incoming and approximately EUR 3 billion outgoing. Now in the aggregate and without matching individual incoming and outgoing payments, this totals to approximately EUR 17.8 billion incoming and approximately EUR 18.9 billion outgoing over the 5-year period, with all payment denominations converted into euros. Significantly, the value of the transactions meeting these criteria decreased on an annual basis from 2014 to 2019 for Swedbank Estonia and Swedbank Latvia. Alerted activity in Lithuania, although generally lower than the other banks, slightly increased into 2018, primarily due to the activities of certain customers that are being offboarded by the bank. As I noted at the beginning, the investigation also examined, during a similar 5-year period, Swedbank's Baltic subsidiaries customers and transactions for a potential OFAC violations. That review identified 582 transactions amounting to approximately USD 4.8 million that constitute potential OFAC violations. 95% of these transactions were processed by the banks in the 2015 to 2016 period. The vast majority involves salary payments and payments associated with the operation of a vessel whose owner and operator were located in Crimea and used Swedbank in the Baltics. So how did this happen at Swedbank? In sum, Swedbank's senior management historically failed to establish clear lines of AML-related responsibilities, particularly between the business, known as the first line of defense, and compliance, known as the second line of defense. Throughout their review period, Swedbank CEOs appeared to lack an adequate appreciation of the severe risk posed to the institution by the HRNR business in Baltic Banking when combined with the ineffective AML controls. The CEOs repeatedly received reports from group internal audit that noted reoccurring deficiencies over the years, particularly with respect to deficient customer onboarding procedures and transaction monitoring, but nonetheless, failed to marshal sufficient resources or to convey a tone of urgency to remedy these deficiencies adequately. The investigation also found that senior management's failure to appreciate the degree of legal and reputational risk to the bank impacted the manner in which these issues were or were not escalated to the Board. While internal audit, throughout the review period, repeatedly found and reported serious AML control deficiencies, which were raised to the Swedbank Audit Committee of the Board and often summarized to the full Board, Clifford Chance's interviews of board members indicated that the Board generally understood, based on statements from Swedbank's management, that these matters were under control. Although the minutes of the Audit Committee do reflect relevant discussions of these issues, the full Board record does not reflect significant challenges by the Board or direction from the Board to management on the AML issues that were presented to them. During this period, group compliance, with the assistance of outside experts, such as the law firm Grimstad, and separately from the activities of internal audit, had identified serious AML control deficiencies and potentially serious legal risk to the bank arising from those deficiencies. In some cases, the more serious findings were not escalated in a timely manner to the Board or shared by compliance with internal audit. The investigation also identified a number of employees, including senior management, whose actions or inactions caused or contributed to the perpetuation of the AML problems in the bank's Baltic subsidiaries. Clifford Chance shared the facts regarding these employees with the bank over the course of the investigation, and the bank consequently separated several of them from Swedbank. Further, the investigation considered the completeness and accuracy of Swedbank's public disclosures concerning AML compliance and related issues in view of the facts established in the course of the investigation. When considered in light of the facts developed in the investigation, certain statements during October 2018 and February 2019 made by Swedbank and its executives concerning Swedbank's historical AML compliance, then current AML compliance and exposure to certain types of AML risk were inaccurate or presented without sufficient context. Since the investigation began in early 2019, Swedbank has replaced its CEO and has a mostly new management team, including a new Head of Baltic Banking, new senior management at Swedbank Estonia, a new CEO of Swedbank Estonia and a new Group Chief Compliance Officer. They've taken employment actions against a range of employees that the bank has determined fell short of its expected standards. Moreover, Swedbank has a new Chairman, and the Board now is comprised of mostly new members. In contrast to the historical remediation efforts, Swedbank and its Baltic subsidiaries, with the support of the Swedbank Board, have embarked on a much more comprehensive approach and remediation plan to address and to strengthen AML and sanctions compliance frameworks. They've undertaken a review of Swedbank's corporate governance. They've engaged external consultants to assist with remediation efforts. They've increased AML and sanctions resources across all 3 lines of defense and continued to offboard customers that do not meet Swedbank's current risk appetite. In addition, Swedbank is planning to engage a consultant to assess the current state of Swedbank's AML and sanctions policies, procedures, systems and controls, including their implementation. The consultant will identify gaps against regulatory requirements and industry best practices and then help Swedbank address those gaps and then, finally, conduct assessments to ensure any such gaps have been filled. Lastly, the bank is undertaking a review of its culture and is implementing a 152-point key action plan. This concludes my remarks. I thank you all for your attention. I'd now like to open the floor to any questions.

Thank you, Mr. DiBari. And here in Stockholm, we will, as Mr. DiBari said, open up for questions. You will have one question each for the starting round. And we have microphones. And I saw that Mr. [indiscernible] waved his finger, Uppdrag Granskning. So please give him a microphone so he can connect with Mr. DiBari.

Yes. I was wondering, what was the explanation from Swedbank to Clifford Chance about only focusing on the 5-year period in the transaction analysis and not all the way back from 2007 when summarizing the turnover of the high-risk nonresidents?

Yes. In our report, we addressed the activity for the high-risk nonresident customer segment for each of the Baltic subsidiaries over the 2007 to 2019 period. We focused on the transaction analysis against the detection scenarios for that 5-year period because it overlapped for a couple of years before they began the derisking exercise and continuing to present in order to provide a picture not only of the past, but whether efforts since 2016 to derisk assisted with the situation.

Yes. Do we have further questions? We have a Swedish radio, Mr. [ Philippe Romquist ].

You said that you conducted a number of interviews. What explanation did the former CEOs give for their lack of appreciation for the risks of money laundering?

Well, that -- we spoke to 2 former CEOs. The earlier CEO was not focused on AML issues. There were other commercial elements that had the individual's attention. The more recent CEO points to the number of steps they did take, including the derisking of the HRNR portfolio and the long list, which we've detailed in the report, of internal investigations of exposure to AML risk from counterparty banks as well as responding to allegations in the media.

Okay. Further questions, Ms. Birgitta Forsberg of Svenska Dagbladet. Let's just have a microphone.

Okay. You point to 3 former CEOs in your report, but you only actually write about 2 of them. Has nothing happened during the first person's watch up to 2009?

Oh, yes, the period 2007 to 2009. Our access to documentation that old led us to focus on the 2 more recent CEOs.

Now Mr. Rex, Dagens Industri.

Yes, in February 2018, Swedbank received a request of a special report from the Department of Financial Services in the U.S. relating to the Panama Papers and Mossack Fonseca. Was Clifford Chance involved in writing or preparing Swedbank's response to that request?

Well, as you may be aware and in contrast to the transparency that Swedish Banking regulation permits, Swedbank, which is licensed in New York by the Department of Financial Services, is prohibited by applicable regulations to discuss any communications with that authority without their advanced permission. That prohibition extends to their lawyers and vendors.

Do you want to continue, Mr. Rex?

Yes. My question was more concerning your communication with Swedbank. In which way Clifford Chance advised Swedbank...

[indiscernible] any discussion regarding Swedbank's regulation by a U.S. banking regulator without that banking regulator advanced approval. So I'm afraid I can't comment on that.

Okay. Let's move on to Dagens Nyheter and Mr. Hans Strandberg. You pass? Mr. [ Ula Lindstrom ], [ Tieto ], would you like to pose a question? Not at the moment. Okay. We have any takers for questions? Mr. Charlie Duxbury of Politico?

Do you think there are any lessons to be learned for the European banking sector more widely beyond Swedbank? And if so, what are they?

Yes. Thank you. I think there probably are a number of lessons, perhaps the most significant one is to make sure that you're not taking things for granted. The best people can sometimes take things for granted and miss things that then add up over the course of time to create situations like we have seen here today.

Thank you. Further questions from Mr. [indiscernible] of Sveriges Television Uppdrag Granskning.

In the fall of 2019, SVT reported about suspected breach of sanctions related to transactions to a U.S. entity and a Russian-owned weapon factory in Florida. We -- as we understood from the CEO of Swedbank, Clifford Chance were analyzing these transactions, and I would like to know the conclusions of your firm about those affairs.

Oh, certainly. We investigated those transactions thoroughly. We determined that there was no OFAC breach involved. And at Swedbank's request, we discussed that with the appropriate regulators and have shared our conclusions.

Further questions? Ms. Birgitta Forsberg of Svenska Dagbladet?

Did you change anything in your report after you read the reports from the finance inspections in Sweden and Estonia last week?

Yes. Thank you. The similarities between our findings and the findings of both the Estonian and the Swedish regulators are -- were, in many respects, very similar. We made no substantive changes to our report as a result of their findings.

Any further questions? Martin Rex, Dagens Industri, [ The Business Daily ].

I have a question concerning the -- Erling Grimstad work for Swedbank. As I understood it, Erling Grimstad made at least 2, perhaps more, draft reports for Swedbank. But there were never any final reports. They were just draft reports. From what I've understood, that's because Swedbank didn't want a final report. So the Board -- just draft reports prepared for by Erling Grimstad. Have you any explanation for why there weren't any final reports from Erling Grimstad to Swedbank?

Yes. We considered all the work that Grimstad and other consultants that the bank had retained over time to assist them to examine AML issues. Some of the reports were marked draft, some of the reports were not marked draft. What we did was trace all of that information up through senior management and examined which got to the Board and which didn't. It didn't much matter to us whether it was marked draft or not draft.

Do we have additional questions? Ms. Forsberg?

Why did the bank onboard customers from Danske Bank when Danske Bank closed its high-risk nonresident portfolio in Estonia in 2015?

Well, we detail in the report, based on the available information, which, for that period of time, is mostly the written record, many of the relevant relationship managers who are involved at Danske Bank Estonia were no longer with the bank by the time the investigation began. As we detailed in the report, they were looking for customers which had a certain revenue level from a commercial standpoint and which they felt that they could get through their high-risk nonresident customer acceptance committee.

Mr. [indiscernible] again.

First, just a follow-up on my previous question. What was the response from U.S. regulators when you put up your conclusions? And secondly, when you're analyzing the business strategy, you are writing that from 2007 there was a specific business strategy of focusing on these clients. And when interviewing all these Swedbank employees, what is your opinion about the importance of these clients during the financial crisis when -- in 2008 when Swedbank had big liquidity problems?

Okay. Two questions there. First, I'm here today to talk about the report, I am not in a position to comment on any depending regulatory investigations. In terms of the business strategy from 2007 until 2016 when I decided to derisk the HRNR business portfolios, we did note the impact of the financial crisis in the early period. That was certainly a distraction to management and across the bank in terms of the control functions. We didn't identify a direct connection between the financial crisis and a decision to pursue that business. In fact, the focus on a high-risk, nonresident business portfolio preceded the review period in 2007 that began further back in time at what was then Hansabank.

Are we are we through with questions? No, [ Birgitta Forsberg ] has one more. Okay, one more from [ Birgitta Forsberg ].

Yes, I'm wondering, were you allowed to interview Erling Grimstad?

Yes.

Okay. I see that we are about to conclude this Q&A session with Mr. DiBari from Washington. Thank you very much. And we will say goodbye here.

Thank you all, and stay safe.

Thanks. Okay. Let's now move on and connect with our Chairman, Mr. Göran Persson, who is going to be with us over the phone. Can you hear us?

I can hear you.

Very good. Now Mr. Persson will give a presentation, and then we will continue on with questions via the phone. Go ahead.

Thank you. When I accepted to become Chairman of the Board in Swedbank 8, 9 months ago, I did that because I realized this bank's tremendous importance for ordinary people in our country, but also in Estonia, in Latvia and Lithuania. I couldn't imagine at that time that when we were to present the report from the regulators and from Clifford Chance, that should take place in an economic environment that was more dramatic than ever, that was completely unforeseen. But it nevertheless underlines the importance for us to be able to go forward and take our part of restoring the Swedish and the Baltic economies. We can't do that if we constantly are chased by our legacy in relation to the money laundering scandals in the Baltic countries. So therefore, it has been a painful and necessary period to go through the bank's modern history, so to say, and to clean up, and that cleaning work is still going on. And we have, of course, with the backdrop of the recent presentations from the regulators and from Clifford Chance, new tasks to deal with. But we must also do it as quick as we can because now we have 7 million customers out there and 600 small companies who are dependent upon that the bank works every day. So far, we have been able to manage, but we need now to improve even more. And therefore, this report from Clifford Chance is an important part in our, so to say, when we are building the future Swedbank. It is in this setting we received the Clifford Chance report. I had it a couple of days ago. I've read it. The Board discussed it yesterday. As you know, and as I have already said, we received the joint report from the financial regulators in Sweden and Estonia a few days ago. And it must be admitted, historically, the bank did not behave in the way it should have behaved. Serious mistakes were made and they are clearly outlined in these reports. And this morning, the Board decided, as a consequence of these reports, to cancel the employment contract with our former CEO, Birgitte Bonnesen. Let me make it perfectly clear. I'm committed to continue to clean up the bank. That work is ongoing. And you are aware, we have a new CEO, Jens Henriksson, in place since October last year. He has made a number of management changes. Due to the coronavirus, the Annual General Meeting has been postponed. But according to proposals from Nomination Committee, almost the entire Board will be new once the Annual General Meeting can be held. And let me be clear. We will leave no stone unturned. Swedbank learns from past mistakes and we seek to be an industry leader in the global fight against money laundering. The 2 supervisors and Clifford Chance have produced good reports, which will help us make the necessary changes. Before handing over to Jens, allow me to once more say a few words about the coronavirus. As I said, we have a key role to play in ensuring that our customers get through this very difficult period in the best way possible. Jens will describe some of the actions we have already taken. There will be more measures to come. I foresee some difficult and complex months ahead, but I can also see the day when we will leave the coronavirus behind us. I can foresee a time when Swedbank has recovered from past mistakes and will continue to fulfill its important role in society. And be sure about one thing, we will continue to develop our businesses and our presence in our 4 home markets: Sweden, Lithuania, Latvia and Estonia. And there I leave the floor for questions.

Mr. Chairman, I'd be very rude to correct you, but I think that we're going to let our CEO make his speech before we open up for questions if that is okay with you?

It's not only okay, I think that we will support it.

Thank you, Mr. Chairman. I give the floor to Mr. Jens Henriksson.

Thank you, Unni. I would like to thank Clifford Chance and Mr. DiBari for a thorough investigation and a clarifying report. On this Thursday, we received the decision and precepts from both the Swedish and the Estonian financial supervisory authorities. And they contain serious conclusions regarding the bank's historic antimoney laundering work, information sharing and sanctions control and a large fine of SEK 4 billion. And as David DiBari said, the Clifford Chance report largely mirror these conclusions. The combined message is crystal clear, and as I've stated many times, the bank's governance and internal controls failed. Banks such as Swedbank are equipped with several controlled functions which allow employees to do businesses and take risk without overstepping their mark. There is a compliance function, there are legal counsel, internal audit, risk function, a senior and executive management, a Board of Directors and the shareholders' appointed auditors. Despite all these governance and control functions, the banks' antimoney laundering functions did not reach acceptable levels. The key question is, what can we learn from this? And what can we learn going forward? And a series of actions have already been launched. In many ways, it's a new bank emerging. If you look on the changes on the slide, there is now a new Chairman of the Board. There is a new Vice Chairman of the Board. There is a new CEO. There is a new Head of Swedish Banking. We are looking for a Head of Baltic Banking. And we have a new Acting Head of Baltic Banking. We have a new Chief Compliance Officer. We have just recruited a new Chief Risk Officer. We have just recruited a new Head of Communication Sustainability. We have a new Board Secretary. And we have taken away the COO -- CEO office. And in December, I introduced a new organization, giving the bank a simpler and clearer decision-making structure, with more customer focus, better and quicker development of banking services and stronger governance and internal controls. Since last fall, a comprehensive program has been underway to strengthen the bank's measures against money laundering and to address the shortcomings that have been identified. At the year-end, as we stated in the Q4 report, the program included 152 different initiatives, of which 67 have been implemented. Today, the program includes some 118 initiatives, and there will be probably come more from the decision from the Estonian Financial Supervisory Authority's precept and the Swedish FSA's decision. And the absolute majority of these initiatives are set to be implemented in 2020. The Board and I have also decided to make a quality assessment of 4 areas with the help of external advisers. A validation of the quality of the bank's work to prevent money laundering and other financial crimes, it will be carried out by the Oliver Wyman. The bank's compliance will be evaluated with the aim to reach industry best practices, and this will be done by Boston Consulting Group. And a review of Swedbank's corporate culture is carried out, this as well by Oliver Wyman. And then the corporate governance structures will be validated by ourselves. The goal for the bank is to be an industry leader in the fight against money laundering. Although much work still remains, a new chapter in the history of the bank is now beginning. And thanks to the financial supervisory authorities and Clifford Chance, we now know what went wrong and we are fixing the problem. Now it's time to leave the history behind and focus on the present. The COVID-19 virus puts tremendous pressure on our clients, the many household and businesses. Now we will commit all our energy on being there for them, providing advice and liquidity. We are open for business. Households can apply for postponements of mortgage payments. We are working with special loans for small and medium-sized companies. We provide credit facilities for large companies. Thank you for listening. Now Unni, the floor is yours.

Thank you. And I think I ask you to stay and we'll make sure that our Chairman, Mr. Persson, is still connected. Are you with us?

Yes, I am.

Very good. Well, let's open up the floor and questions to Mr. Persson first. And then I should ask, is there a need for English now? Anyone needs to pose a question in English? Yes, please go ahead. [ Schweiz Radio ], right?

Radio Sweden.

Radio Sweden.

A question for both Jens and Göran. The report from Clifford Chance, it could not definitively say whether or not money laundering took place. I'm wondering what your opinion is. Do you believe money laundering actually happened at the bank? And given that Estonia seems to be the epicenter of the problems here, what is the future of that branch of Swedbank being active in that region? Should it stay?

Mr. Persson first.

Mr. Persson first, please.

I have no reason to speculate if money laundering has happened or not. It is serious enough without that. And we have, so to say, made an investigation to be able to avoid that it will happen in the future. And then we have no intention to do any other thing than to stay in the Baltic countries. They are our home markets and they have, as well as Sweden, a very good future, and we want to be part of that.

Any additional questions in English? Go ahead. You have a second one.

This one is for Jens. In the press release this morning, you said there were -- clearly there were some cultures that were unacceptable at Swedbank. Can you talk a little bit about what exactly those cultures are or were? And perhaps how entrenched they were at the bank?

Well, I -- let me be clear, if you want to get a look on sort of some culture problems, read the report. I think that speaks for itself. When I came in, I sort of in -- I think it was in December, I took a few decisions. And one of the things I said is that I want to have a culture assessment of Swedbank. So we hired a consultancy firm, as I mentioned in my introduction, and they will look through that. And then I expect to get the results within a few weeks. Might -- I do not know how the coronavirus will affect their interviews and sort of the focus groups we have, so I want to be a little bit uncertain when that would happen. But as soon as that will come out, we will look on what went wrong, what can be built on that's good and what is bad, and then we'll make an action program forward.

Thank you. And next to pose a question, maybe Uppdrag Granskning. Shall we move on -- Should we move on to Swedish? Okay. [Foreign Language]

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