Handelsbanken has unexpectedly fired its chief executive after just 18 months in the job as one of Europe’s most successful banks sought to defend its decentralised business model.

The Swedish bank’s board – headed by former chief executive Par Boman – decided unanimously to oust his successor Frank Vang-Jensen and replace him with immediate effect with Anders Bouvin, the former head of Handelsbanken’s rapidly expanding business in the UK, writes the FT’s Richard Milne.

“This decision is purely related to the individual. Handelsbanken remains strong and our long-term goals stand firm,” said Mr Boman, chairman.

Handelsbanken stands out among European banks for its conservative approach and its highly decentralised model in which branch managers take loan decisions.

Bank insiders said that Mr Vang-Jensen had started to centralise power to the bank’s headquarters in Stockholm, ruffling feathers lower down the organisation and forcing the board to act before the problems became public.

“All managers at Handelsbanken – particularly the branch managers – must have a very high degree of autonomy. Being the most senior manager at the bank therefore requires a special type of leadership – considerably more complex than traditional management,” said Mr Boman.

He added: “Thus, it is possible to be an excellent leader and manager – as Frank Vang-Jensen has been – but not fulfil the requirements of CEO of Handelsbanken.”

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