Swedbank has sacked Birgitte Bonnesen as chief executive only an hour before its annual meeting after disgruntled shareholders criticised her handling of a rapidly-growing money laundering scandal.
Sweden's biggest bank has been trying to calm investor concerns since allegations were first reported by Swedish TV last month.
But a raid on Swedbank's headquarters yesterday by Sweden's Economic Crime Authority proved the final straw for the board of the country's oldest savings bank.
Investors had criticised Bonnesen for her communication and the way she has handled the allegations of money laundering involving Swedbank accounts in the Baltics.
This has sparked investigations by regulators and wiped a fifth off its market value as it battles a growing crisis.
"Bonnesen's dismissal was what we wanted and was the only solution that is viable," Ossian Ekdahl, chief active ownership officer at The First Swedish National Pension Fund, told Reuters from the annual general meeting.
He was among Swedbank investors who, in a rare public expression of discontent, voted against granting Bonnesen freedom from liability for the 2018 fiscal year, leaving her position all but untenable.
Before becoming CEO, Bonnesen worked as Swedbank's chief audit executive between 2009 and 2011, which included overseeing the bank's anti-money laundering policy.
She then moved on to running its Baltic operations until 2014.
Bonnesen denial of any links to the Danske Bank scandal as late as January 29 and her subsequent backtracking after the allegations went public sowed confusion and damaged confidence in Swedbank as an institution, investors said.
The allegations against Swedbank have linked it to Danske Bank which is facing potential lawsuits, fines and sanctions over allegations its Estonian branch allowed €200 billion of suspicious transactions to flow through it between 2007 and 2015.
"Self-evidently support had ebbed and recent CEO comments have not helped confidence during the recent crisis, however management turnover at this time is unlikely to help near term share price performance," KBW analysts said in a note.
The scandal has gripped Sweden, dominating business headlines and sparked parliamentary debates as it has tarnished the reputation Nordic banks have held of being among the most trustworthy and least risky in the sector.
The news has also stunned many Swedes, who take pride in the fact that their country is routinely ranked as one of the least corrupt in the world and boasts a level of transparency that leaves even individual tax returns in the public domain.
Swedbank has so far said banking secrecy law prevents it from answering the main question on the minds of investors, regulators and the public, namely whether it knew and failed to prevent large-scale money laundering through its accounts.
Chairman Lars Idermark said Swedbank had been honest with authorities looking into allegations as both he and acting CEO Anders Karlsson expressed regret over its communications.
"We will do everything we can to be as transparent as possible," Idermark promised investors at the meeting.