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Swedish banks, which represent the larger part of the Swedish financial market and can provide all types of financial services, are usually categorised as universal banks. These consist of SEB, Swedbank and Handelsbanken, with Nordea as the largest foreign lender in Sweden (Big Four).2 Nordea was previously headquartered in Stockholm but has been based in Helsinki, Finland since 2018.

Number of employeesLending to the publicBalance sheet total
Nordea28,051€330 billion€552 billion
SEB16,1931,770 billion Swedish kronor3,040 billion Swedish kronor
Handelsbanken12,5632,306 billion Swedish kronor3,135 billion Swedish kronor
Swedbank16,2131,681 billion Swedish kronor2,595 billion Swedish kronor

Sweden has witnessed vigorous activity within the payments and fintech sectors in recent years, with a number of new companies and business models entering the market (e.g., Klarna, iZettle and Trustly), creating a new competitive landscape on the Swedish market, a trend that is very much ongoing and strengthening. There is also a strong focus on financial regulation, with anti-money laundering issues currently being a top priority (see below).

The regulatory regime applicable to banks

i The Swedish Banking and Financing Business Act

Entities wishing to conduct business that is regulated under the Swedish Banking and Financing Business Act (BFBA) (namely, a combination of accepting repayable funds from the public and lending) can choose to apply for either a banking business licence or a credit market company licence, depending on the types of activities contemplated. Both types of licence are granted by the Swedish Financial Supervisory Authority (SFSA), and are passportable into other European Economic Area (EEA) jurisdictions in accordance with the Capital Requirements Directive (CRD) as implemented through the BFBA. Upon obtaining a banking or credit market company licence, the relevant entity would qualify as a Swedish credit institution pursuant to the CRD and the Capital Requirements Regulation (CRR).

ii Forms of banks

Most Swedish credit institutions are formed as limited liability companies. However, the Swedish banking market also consists of cooperative banks, which are economic associations that have as their purpose the provision of banking services to their members. There are also savings banks, which do not have any actual owners. Instead, their business is conducted under the supervision of several principals who appoint the bank's board of directors, and dividends may only be distributed in accordance with instructions provided by the original founders or reinvested in the bank's business.

iii Branches of foreign credit institutions

Foreign non-EEA credit institutions must establish a Swedish subsidiary or branch and obtain a Swedish licence from the SFSA to provide their services in Sweden. However, these activities will only be licensable if considered to be carried out in Sweden and outside the de minimis exemption. It is not clear at which point a certain activity would be considered to be carried out in Sweden, as an assessment would be made by the SFSA (and ultimately the Swedish courts) for each case. It is clear, however, that a number of factors are taken into account, and that the SFSA will judge each case on its own merits. The SFSA would consider, inter alia:

  1. whether the foreign bank had taken the initiative in contacting a prospective client;
  2. whether the foreign bank operated from fixed (or frequently used) facilities in Sweden;
  3. the number of contacts in Sweden;
  4. the type and number of Swedish clients; and
  5. whether the foreign bank acted through a permanent representative in Sweden (such as an agent).

EEA credit institutions may provide their services in Sweden on a cross-border basis after having obtained a Swedish cross-border passport pursuant to the CRD. The establishment of a Swedish representative office is also possible but subject to numerous restrictions. Should they wish to provide their services from inside Sweden, they will be required to set up a Swedish branch and apply for a Swedish branch passport pursuant to the CRD.

iv Supervisory architecture

The SFSA and the Swedish Central Bank (SCB) have the main responsibility for monitoring Swedish credit institutions' compliance with the applicable laws and regulations. The SFSA has a direct responsibility to supervise Swedish credit institutions, whereas the SCB has overall responsibility to promote the stable functioning of the Swedish financial system.