His firm, Swedbank, was Euromoney’s best bank in Sweden last year, beating institutions with extraordinarily good profitability and financial standing, and this after suffering more than Swedish peers in the 2008 crisis.
How, then, did Swedbank’s chairman and board think it right to engineer his removal in February and even justify it primarily on the basis of competence?
The bank’s decision to forward a report to the local regulator about transactions it said Wolf carried out – and could constitute market abuse – seems to have triggered Wolf’s sudden departure. Wolf has denied wrongdoing.
Swedbank’s board had already started a process to find a new CEO, it says, because of disappointing levels of client and employee satisfaction. So Wolf would have gone anyway, it seems. Did the two events therefore happen at the same time just by chance?
There is some evidence to suggest Swedbank’s clients are not as happy as its shareholders. It performs worst among the big Swedish banks in a customer satisfaction survey by Stockholm-based EPSI Rating group and the Swedish Quality Index.
Was trust in the bank broken? Chairman Anders Sundström similarly seems to think the very public debate in recent months in Sweden about investments by the bank’s management had important implications for the brand.
But there is also a sense, more widely, that Swedbank was sick of everything Wolf stood for: his background at corporate banking leader SEB, perhaps; his international acclaim – and above all his push for ever-greater efficiency.
Nordic banks are known for their efficiency and digitalization drives, but under Wolf Swedbank was particularly ruthless. This may have been a necessity as Swedbank trailed rivals when Wolf took over in 2009, but he clearly did not shrink from the task. Swedbank’s branch network shrank by about a third under his tenure.
By contrast, Handelsbanken (another Nordic investor darling) now has almost twice as many Swedish branches, even though Swedbank still claims the highest number of customers in Sweden. Handelsbanken, meanwhile, performs markedly better than Swedbank in client satisfaction.
Handelsbanken can afford a different strategy, perhaps, because it focuses on a richer part of the population. Nonetheless, Sundström, who is from Sweden’s far north, clearly wants someone with a more folksy and less wolf-like face for his new CEO. He wants someone to reassure rather, than scare the staff, someone to relish meeting clients in the rural outposts for which Swedbank is known: someone who knows how they think.
Birgitte Bonnesen, formerly head of Swedish banking, and a Swedbank lifer, fits that description far better than Wolf. She has been appointed acting CEO and although the bank is looking for other candidates, it could stick with her.
Now Wolf’s job is done, will Bonnesen make employees happier by spending more, and make customers happier by cutting mortgage rates at the expense of dividends? Absolutely not, is Bonnesen’s response – though it might be said her points in a recent analyst call about how the bank might otherwise improve on Wolf’s track record were sometimes rather intangible.
Bonnesen talks about simplification and accessibility in digitalization, about the use of data – but there is an extent to which, after a basic level, bank websites are interchangeable. Wolf’s efficiency drives went hand-in-hand with commitment to digital channels, investment in which rose year-after-year.
Analysts appear ready to give Bonnesen and Sundström the benefit of the doubt. Sweden’s super-charged housing market is a huge risk for a bank with so much of its book in mortgages; surely they realise this alone necessitates water-tight capital and profitability.
For Swedbank, and others, the difficult lies in striking a balance between the right message to shareholders on the one hand, and to staff and customers on the other. It would be easy to take Wolf’s ousting as a backlash against his financial strictures. If the market doesn’t cry foul, however – if it accepts that Swedbank can rebuild its popular image without prioritising staff numbers over tech – it shows just how much credibility Wolf has built.