The rapid rise in household debt is worrying the heads of the Riksbank, the Financial Supervisory Authority, and the National Debt Office (Riksgälden). The three write in Dagens Nyheter (DN) that low housing construction, falling interest rates, and scrapped taxes have driven up home prices and spurred borrowing, and warn that this trend could forebode the coming of a financial crisis. Amortisation requirements should be implemented as soon as possible, conclude the three.
Swedish cosmetics firm Oriflame surprised the market positively with its Q2 report, despite lower than expected sales in Russia, which fell by 15%, measured in local currency. Meanwhile the beauty company saw sales in Asian countries increase by 20%.
Latin America, Turkey, Africa and Asia now account for 48% of total sales, and dependency on Russia and Ukraine is diminishing.
“The strong growth in China continues, and is becoming an increasingly important part of our operations,” says Magnus Brännström, chief executive, who has worked hard to reduce the company’s cost base.
Helena Stjernholm, who has worked for private equity firm IK Investment Partners for 17 years, will succeed Anders Nyrén as chief executive of the Lundberg sphere’s investment company Industrivärden.
“She has a good track record, has done well and worked on issues relevant to Industrivärden. She simply has a suitable background,” said Fredrik Lundberg, chair of Industrivärden, who pointed out that Stjernholm was one of several candidates for the top job.
Those who have previously criticised the culture at Industrivärden lauded the appointment of Stjernholm, whose primary task will be to rebuild trust in the dented business empire and also manage the controversial system of cross-ownership within the sphere.
Christian Clausen is resigning from the post as chief executive of Nordea, and denies any conflict between himself and Björn ‘Nalle’ Wahlroos, chair of the board of Nordea. Clausen’s successor Casper von Koskull, who was recruited to the bank in 2010 by Clausen, says that his predecessor’s financial targets and strategy for the bank, presented in the spring, remain unchanged.
Meanwhile the Financial Supervisory Authority (FI) is said to have been hesitant to Clausen continuing in the post as Nordea’s chief executive after the bank’s failed efforts to properly tackle money laundering. In May the Swedish regulator issued a warning to Nordea and the maximum fine of SKr 50 million over its lax anti-money laundering controls.
According to what sources have told Svenska Dagbladet (SvD) the Authority’s criticism of Clausen triggered his resignation. Clausen himself denies this in an interview with Dagens Industri (DI), “There is no conflict. We’re agreed on what will happen and we’ve run this process together. ‘Nalle’ has also asked if I want to sit on the board of Sampo, which I would like to do.” He also describes the FSA’s criticism and fine as his biggest failure as CEO of the bank.
Clausen leaves his post with a pension worth over SKr 140 million.
Swedbank sends sensitive, personal information concerning the estates of deceased persons in poor quality envelopes to customers via its banking operations in Lithuania. The low-cost envelopes tear easily and lack protective lining, allowing third parties to readily access classified data about bank customers’ assets.
According to one expert, Swedbank is estimated to save around 2 öre per envelope. A legal administrator, who has handled estates of deceased persons for many years, says she does not consider Swedbank’s duty of confidentiality to customers is being properly safeguarded with the use of the envelopes.
Swedbank says it has not received any complaints.
In June, the number of recorded nights spent by foreign tourists in Swedish tourist accommodation establishments increased by 6.2%, compared with the same month in 2014, according to statistics from the Agency for Economic and Regional Growth (Tillväxtverket). The total number of overnight stays was around 1.6 million, and was mainly at accommodation establishments in the major cities.
Visita (the organisation for the Swedish hospitality industry) forecasts that tourism figures will spike last summer’s record high figures.
The weak Swedish krona is definitely contributing to Sweden’s flourishing tourism industry, says Carl Hammer, currency expert at SEB. On the other hand, the weaker Russian rouble has meant a decline in the number of Russian tourists in Sweden during the first five months of 2015. The number of Russian tourists fell by 32% during the period, show figures from Statistics Sweden and Tillväxtverket.
The government’s announcement that it will lower tax deductions for domestic service work and household repairs (ROT deduction) from 50% to 30% has brought the sector to a standstill.
According to estimates by the Swedish Construction Federation (BI), there is a risk that up to 8,300 jobs will disappear if the ROT deduction is lowered.
“As yet no decision has been pushed through the Riksdag so there is still an opportunity to back down from the proposal,” says Björn Wellhagen, enterprise policy director at BI.
Both the Economic Crime Authority (EBM) and National Financial Management Authority (ESV) have given thumbs down to the government’s proposal and warn of an increase in the shadow economy.
Peter Dahlen, the head of the American Chamber of Commerce in Sweden, tells Dagens Industri (DI) that the main focus of Amcham is to grow as an organisation and develop Swedish-American business within Sweden.
“Companies that are interested in transatlantic trade are potential members,” says Dahlen, whose aim is for Amcham to increase its membership base from 210 to 250 by the end of the year.
Dahlen is a firm believer in the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, even if it will take time to complete the trade deal.
He considers some of the fears concerning the investor-to-state dispute settlement (ISDS) to be legitimate, and says, “The process could definitely become more transparent and free of conflicts of interest.”
Amcham is also focused on helping Swedavia, which operates all airports in Sweden, to introduce preclearance at Arlanda for entry to the US.
Energy Minister Ibrahim Baylan believes that biomass energy can replace nuclear energy in the long term.
“Thanks to bioenergy Sweden already has ample capacity to meet the 2020 emission targets. But the interesting thing is that the growth potential is still very big. Our forests’ net growth capacity is 25 million cubic metres per year. Sweden has 80% more wood pulp in its forests compared with 100 years ago,” says Baylan.
The challenge is now for the minister to persuade sceptical European colleagues and environmental organisations that biomass is a viable alternative.
The largest provider of temporary accommodation for asylum seekers in Sweden invoiced the Swedish Migration Board for 330 million kronor for the first six months of this year. The sum was SKr 172 million for the same period last year.
Swedish entrepreneur and former politician Bert Karlsson’s company Jokarjo has invoiced the Swedish Migration Board for SKr 137 million so far this year for its services, to be compared with SKr 32 million for the same period last year.
“We’re best at what we do and our prices are the lowest, which is why we’re growing the fastest. Sales and profit will continue upwards,” says Bert Karlsson, who says Jokarjo and other providers could lower their prices considerably if the Migration Board were to extend their contracts from today’s three months to up to three years.
Karlsson tells DI his dream is to turn refugee reception centres into integration schools, and that he plans to open 20 new centres specifically aimed at unaccompanied child refugees.