By Esha Vaish and Johan Ahlander
STOCKHOLM (Reuters) - Swedbank has suspended with immediate effect the two most senior executives at its Estonian business, which is being investigated over alleged money laundering, but also reiterated its commitment to the Baltics.
Sweden's oldest retail bank has already parted ways with its chief executive and chairman this year after alleged links to a money laundering scandal at Danske Bank, and is being investigated in the United States, Sweden and the Baltics.
The most recent allegations, reported by Swedish state TV in March, said that Swedbank processed gross transactions of up to 20 billion euros ($22.4 billion) a year from high-risk, mostly Russian non-resident clients, through Estonia from 2010 to 2016.
Swedbank's proposed new chairman -- former prime minister Goran Persson -- said he hadn't even contemplated Swedbank pulling out of the Baltics.
"It's three neighbouring countries I as prime minister was deeply involved in bringing in to the European community from the former communist oppressors," he said.
"To tell them now 'sorry, we have problems and we have to leave', that hasn't even crossed my mind," Persson, prime minister for a decade until 2006, told Dagens Industri.
Persson, due to be elected chairman at an extraordinary general meeting on Wednesday, also said a new chief executive for the bank could be in place by "end of autumn."
Although Swedbank initially denied the allegations, which first related to the period between 2007 and 2015, mounting shareholder pressure for transparency led to the bank's admission in April to failings in combating money laundering and an internal inquiry into compliance with anti-money laundering rules.
Robert Kitt, who has been Estonia CEO since 2015, and Vaiko Tammevali, Estonia CFO since 2014, had both been suspended, Swedbank said in a statement late on Monday.
"(The) decision is a consequence of the ongoing internal investigation," Charlotte Elsnitz, Swedbank's head of Baltic Banking, told journalists at a news conference on Tuesday.
Elsnitz declined to give any details about the reason for the suspensions, but said Swedbank remained committed to Estonia, where it is the largest bank with more than 900,000 private and 132,000 business customers.
Kitt and Tammevali, both Estonian, have worked at the bank for over a decade. Kitt's previous jobs include heading the wealth management and corporate banking units, while Tammevali's included leading the private banking and credit risk units.
Kitt thanked his colleagues in a farewell message posted on Facebook in Estonian on Monday night.
"Today I am leaving my position as CEO of Swedbank in Estonia after being about 10 years in service. What a ride it has been! It has been tremendously tense, interesting, with lot of learning and hard work," he said.
Kitt did not respond to requests for further comment, while Tammevali did not respond to an emailed request.
Credit Suisse analysts said that the suspensions could help Swedbank in any discussions with authorities.
The Estonian financial regulator declined to comment and said that their investigation with Sweden and other Baltic authorities was ongoing, while Swedbank said it was cooperating fully with authorities.
Swedbank said Olavi Lepp, its chief risk officer, had been named acting CEO of Swedbank Estonia, while Anna Kouts, its head of treasury, would become acting CFO in the Baltic country.
The bank's shares, which have lost about a third in value since the scandal broke, were down 2 percent at 137.85 Swedish crowns at 1330 GMT. ($1 = 0.8898 euros)
(Reporting by Johannes Hellstrom and Esha Vaish, editing by Deepa Babington/Keith Weir/Alexander Smith)