Margit Härma: Can we still rescue our client relationship, Helo?

Margit Härma
entrepreneur, customer of Swedbank


Dear Helo Meigas, 

It’s the first time that I am writing to you. As Swedbank’s Group Risk Manager, you have probably made the most stellar career in the international financial world among Estonian women. Because of your background and today’s job position, you are also the right person to be asked what has happened to Swedbank. The bank that was once the flagship of Estonian business can no longer be trusted because you lose your clients’ money, you say in court that you no longer have any records of transactions relevant to the case and that all customer claims stopped to be valid a long time ago.

It’s because of such attitude that I need to ask you whether our client relationship with Swedbank could still be rescued. And if one were to take the issue from a personal level to the public level – does Estonia need a bank that customers cannot trust anymore? Should a licensed credit institution operating under the „legally everything is OK“ principle have a lease of life in Estonia?

As a member of Swedbank’s management team and Group Risk Manager, you have probably seen recent press coverage of the dispute between Swedbank and a number of its customers and investors on whether Swedbank is responsible for failed investments made in Romania more than ten years ago. Here is a link if you need more information about the case: In spite of the fact that customers and investors  have repeatedly made enquiries, staged protests, and even published their questions in different newspapers in the form of public letters and advertisements. Swedbank has not bothered to pick up a phone or respond. One would say that the bank is stonewalling. Is it another „legally everything is OK“ situation?

Has Swedbank lost credibility?

As a woman, I value trust and dependability above everything in relationships and in the society as a whole. To draw a parallel to how Swedbank has treated its clients, it would be the same if we could not trust the Estonian police any more to keep our streets safe. Or if we could not trust Estonian doctors to do everything in their power when our baby gets sick. Partly for what is enshrined in laws that regulating life in Estonia and partly for ethics and professional honour. Following the dispute surrounding the Romanian investment, one gets the impression that Swedbank has thrown both morals and professional honor out with the bathwater of money laundering. 

How is it possible that, having trusted my savings to a licensed bank and fully authorized it to manage and grow my funds, the bank takes the liberty of investing my money irresponsibly and in a way that defies all logic? How else to assess the transactions where with the bank’s knowledge and its approval, the bank uses the money received from me (and many other clients) to buy land for 170,000 euros per hectare at the time when its market price is about 1,000 euros per hectare. And above all, call it an investment. And when the clients start to look into the case, the bank assures everyone that all is well and urges customers to wait a little more until the situation normalizes. And later when the dispute is in the court, the bank claims that it no longer has the property assessment reports on which the purchase price was based. Moreover, the bank claims that the whole thing is obsolete, tells everyone to forget it and says that clients only imagine that something is wrong. It’s as if I had sent my kid to a store with a 100-euro bill to buy ice cream and he returns with one ice cream and tells me that this is how much it cost and adds that he has lost the receipt as well.

Confusing wealth management clients today, and scamming pensioners tomorrow?

I know from my experience that investments don’t always go as planned, but in this case we are not talking about realization of the market risk, but about someone’s negligence, stupidity or, in the worst case, fraud. And who else than a Swedbank portfolio manager with a statutory duty of care, loyalty and obligation to keep investors informed has the responsibility and professional skills to exercise such care and supervision. Even if the investment decision made by so-called professionals turn out to be below par over time, such investment transactions must definitely be carried out accurately and properly documented.

Otherwise, in 10 to 20 years, a large proportion of Estonians may be in the situation where they go to their pension fund manager in Swedbank, who then only spreads his arms, saying that the client’s pension savings are gone, that there are no papers and the bank has no idea what happened. And verbally attacks the client for bringing up such an old issue, as Swedbank is a forward-looking and modern financial institution. This is exactly the case today with Swedbank customers and investors whose EUR 8.4 million was used in 2007 to buy just over 46 hectares of land plots in Romania with Swedbank’s knowledge and support. Land whose market price at the time was only EUR 46,000 and of which, by now only around a quarter has been sold for few hundred thousand euros. The value of the rest of the properties is close to zero because nobody wants to buy them.

The only known identified “winner” in these transactions is Swedbank itself, having pocketed several hundred thousand euros in commissions and administrative fees. Doesn’t seem like a fair game to me.

Can we trust women more than men?

The expression that the bank sells only trust has already become a cliché. As a citizen and entrepreneur, I believe that such a large bank that accounts for most of the nation’s financial system plays an extremely important role in ensuring a general climate of mutual trust. Helo, as the first managing director of the Tallinn Stock Exchange in 1995-1998 and as the vice president of the Estonian central bank in 1998-2000, it is you who should know everything about good corporate governance, social responsibility, and the importance of transparency and integrity in business. Why, then, has Swedbank lately not observed its business practices that it is actively preaching in its corporate communications?

I recall that a few years ago I was at a conference organized by the Responsible Business Forum with Swedbank’s private banking representative and discussed the possibility of sustainable business in Estonia. At the time, I could not have imagined that at the same time the same bank that was so proudly declaring the importance of transparent policies was behind closed doors doing things that were directly contrary to such values.

Helo! As you have won a title of Global Leader for Tomorrow by the World Economic Forum in Davos (1998), I hope that it is you, who can take the rudder away from the men who have lost the moral compass and steer Swedbank back to the right track. After all, it’s often said that if you really need to do something, ask a woman to do it.


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