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Swedish banking giant quits Baltics – says it’s not worth the cost

Swedish banking giant Handelsbanken is closing down its Baltic operations, but denied the decisionhad anything to do with recent money laundering scandals tied to two other Scandinavian banks.

Swedish banking giant quits Baltics – says it's not worth the cost
Handelsbanken's office in Stockholm. Photo: Alexander Larsson Vierth/TT

Handelsbanken said on Thursday it was leaving the Baltics due to unsatisfactory performance.

“We have come to the conclusion that profitability is too low, while costs are too high. Despite efficiency-enhancing measures in the past few years, the operations in the three Baltic States have not shown satisfactory profits,” Richard Johnson, head of Handelsbanken International, told AFP.

He went on to say that circumstances had also changed drastically since the bank established its presence in the region a decade earlier, and that local offices were no longer necessary.

“Rapid technological advances, which have resulted in new players on the market, and new opportunities, mean that we can now help many of our customers directly from the home markets,” Johnson said.

The bank would therefore start to wind down its business in Estonia, Latvia and Lithuania during 2020.

READ ALSO: What you need to set up a bank account in Sweden

Johnson also stated that the bank's decision had nothing to do with the recent scandals surrounding allegations of extensive money laundering at two other Scandinavian banks tied to Baltic operations.

Denmark's largest bank Danske Bank is currently the target of criminal probes in several countries over some 200 billion euros ($226 billion) in transfers that passed through its Estonian branch between 2007 and 2015, involving some 15,000 foreign clients, many Russian.

Swedish competitor Swedbank has also been embroiled in a scandal since February when an investigative news show on public broadcaster SVT claimed to have seen documents showing that at least 40 billion kronor ($4.3 billion) of suspicious transactions had been channelled to Baltic countries from Swedbank accounts.

Many of the transactions took place between 2007 and 2015, and some of the money may have first transited Danske Bank.

Handelsbanken has largely remained clear of the money laundering scandals and its operations in the Baltic States have only represented a fraction of some of its Nordic competitors.

For instance, according to the Estonian Banking Assocation, Handelsbanken's market share in Estonia in 2017 was only one percent, compared to Swedbank's 40 percent.

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What happens if you don’t pay a bill in Sweden?

Sweden's Enforcement Authority is responsible for collecting unpaid debts, fines, and declarations of bankruptcy. So, what happens if an unpaid bill reaches the Enforcement Authority, and can you do anything if you have a black mark on your record?

What happens if you don't pay a bill in Sweden?

What happens when you have a bill?

Usually, if you have a bill in Sweden, you will receive an invoice (faktura) either digitally or via post, which will include details such as the amount owed, who to pay and the date payment is due (förfallodatum).

If you don’t pay the invoice in time, the person you owe money to may turn the case over to inkasso, or a debt collection agency, who will again send you an invoice for payment, plus the agency’s fee.

If this invoice goes unpaid, the Enforcement Authority will get involved.

The Swedish Enforcement Authority, Kronofogden in Swedish, is responsible for collecting unpaid debts. It does this by providing advice and support to those who are unable to pay their debts, as well as helping creditors – such as, for example, landlords whose tenants have not paid their rent.

The debt collection agency will pass unpaid bills on to them, and you may receive a betalningsanmärkning or black mark on your credit record.

Before you receive a black mark, however, you will first receive an ansökan om betalningsföreläggande from the Enforcement Authority. If you pay this in time, your debt will not be registered as a betalningsanmärkning.

There are some types of payment where you can receive a betalningsanmärkning without the bill going through a debt collection agency first. These are usually payments owed to the state, such as unpaid tax, unpaid student loan repayments or unpaid municipal parking fees.

You are unlikely to come into contact with the Enforcement Authority unless you miss or forget to pay a bill.

What happens if you get a black mark?

A black mark can have pretty major consequences – it can stop you from hiring a car, getting a credit card, borrowing money (including getting a mortgage), taking out a phone contract or even renting an apartment, as well as barring you from ordering anything on credit or paying via invoice.

This is due to the fact that whenever you apply for a loan or credit in Sweden, the lender will check your credit score (kreditupplysning) to see if there is any risk of you not paying up. Many lenders have a strict policy on not lending to individuals with black marks on their credit score to minimise risk, no matter whether the mark is due to an unpaid phone bill or a missed mortgage repayment.

How can I check if I have one?

You can check if you have a black mark by contacting a credit check company – here is a list of all credit check companies in Sweden. Some may charge a small fee for the service, whereas others offer it for free.

One advantage of checking your own credit score before contacting a lender is that your credit score is not affected when you carry out a check on yourself. 

If, however, a bank carries out a credit check on you, this can affect your credit score – it’s usually not an issue if you carry out one or two checks, but a lot of checks in a short period of time could cause issues.

Can you do anything to remove it?

Unfortunately, no. 

All you can do is wait – a black mark will disappear from your record after three years for private individuals or five years for businesses. 

The best strategy is to avoid getting a black mark on your record in the first place – such as by paying your bills via autogiro (direct debit), keeping an eye on your post (as well as your digital post), and paying for items up-front if possible to avoid invoices, rather than using “buy now, pay later” credit services such as Klarna or Clearpay.

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