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UPDATE 1-Swedbank appoints Henriksson as new CEO in bid to rebuild trust

(Adds context, background, detail, quotes from chairman and CEO)

Aug 28 (Reuters) - Swedbank has appointed Jens Henriksson, chief executive at insurance group Folksam, as its new CEO as it tries to rebuild confidence in the bank after a money-laundering scandal.

Sweden's oldest retail bank earlier this year dismissed its chief executive, accepted the resignation of its chairman and lost more than a third of its market value after its Estonian business was caught up in money-laundering allegations that have also engulfed Danish peer Danske Bank.

In April, Swedbank admitted some failings in its money laundering processes and promised to launch a comprehensive internal investigation.

The most recent allegations against Swedbank, reported by Swedish state TV in March, say it processed gross transactions of up to 20 billion euros ($22 billion)a year from high-risk, mostly Russian non-residents through Estonia from 2010 to 2016.

With Jens Henriksson, the bank will have a CEO who combines an experienced leadership, a strong communicative ability and a broad knowledge of the banking and financial industry," Goran Persson, Swedbank's chairman since June, said in a statement on Wednesday.

Henriksson, who will take over the job "as soon as possible," is currently CEO of Swedish insurance group Folksam. He was previously CEO of the Stockholm Stock Exchange and worked at the Swedish Ministry of Finance.

I feel both humble and honored, and I am also aware of the challenges ahead," Henriksson said.

"My major task as President and CEO of Swedbank is to rebuild the trust for the bank, to further develop the banks sustainability profile and to continue the successful digitalisation journey."

Swedbank is the subject of a joint probe by the Swedish and Baltic financial watchdogs and is also being investigated in the United States where it faces the threat of hefty sanctions and fines.

Persson, a Social Democrat who served as Sweden's prime minister for a decade until 2006, pledged in June to "clean the house" and restore confidence in Swedbank.

Henriksson will take over from acting CEO Anders Karlsson, who will return to his regular role as chief financial officer. ($1 = 0.8973 euros) (Reporting by Shubham Kalia in Bengaluru and Johannes Hellstrom in Stockholm; Editing by Kirsten Donovan)