Swedbank dramatically dismissed its Chief Executive Birgitte Bonnesen on Thursday shortly before its annual meeting after the lender faced allegations it was involved in money laundering in the Baltics.

"The developments during the past days have created an enormous pressure for the bank. Therefore, the Board has decided to dismiss Birgitte Bonnesen from her position," Swedbank Chairman Lars Idermark said in a statement.

Bonnesen's position became virtually untenable after three of its top five investors said they would vote against granting her freedom from liability for its latest financial results at the annual meeting.

Money laundering allegations against Swedbank, which first came to light in a media report last month, have sparked fears that the largest lender in the Baltic region will become embroiled in a scandal engulfing rival Danske Bank, and face the threat of lawsuits, fines and other sanctions.

Swedbank shares fell a further 3.7 percent on Thursday.