Swedbank's shares slid more than 7 percent on Thursday, adding to heavy losses from a day earlier when a report linked one of the biggest lenders in the Baltic countries to a regional money laundering scandal involving Danske Bank.
Danske is being investigated in five countries over some 200 billion euros ($226 billion) of suspicious payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian branch.
Swedish TV said on Wednesday that documents showed at least 40 billion Swedish crowns ($4.30 billion) had been transferred between accounts at Swedbank and Danske in the Baltics between 2007 and 2015, prompting Estonia to investigate the allegations.
Analysts said that one of the biggest risks that Swedbank faced was that Bill Browder, once the biggest foreign money managers in Russia who is now campaigning to expose corruption, might file a criminal complaint as he had in Danske's case.
Browder has, through his firm Hermitage Capital Management, sent information to and pushed various government authorities to bring money laundering cases against Danske and has even lodged accusations against Swedbank rival Nordea.
"We see the prospect of a criminal lawsuit from Bill Browder and any potential U.S. investigation as the price-sensitive issues," Jefferies analysts said in a client note.
Swedbank CEO Birgitte Bonnesen told analysts late on Wednesday that Browder had told her that he would not be filing a lawsuit. Browder, however, was quoted by Bloomberg shortly after as saying that he could not rule out making a formal complaint against Swedbank.
Swedbank shares were down 7.2 percent at 169 Swedish crowns at 0823 GMT on Thursday, while Nordic peers SEB and Handelsbanken were down 2.3 percent and 0.05 percent. Nordea's stock was down about 2 percent as well.
On Wednesday, the Swedbank stock shed almost 14 percent, the heaviest daily fall for the shares since the financial crisis.
Bonnesen also said she was comfortable with the safeguarding systems that had been in place throughout the years and Swedbank had reported any suspicious transactions it caught, but could not offer assurances that it had not missed any.
Morgan Stanley said Swedbank's answers to queries about the report revealed little new reassuring information.
"As such we do not see sufficient reassurance to drive an immediate recovery in the shares," the analysts said in a note.