Commonwealth Bank boss to retire amid laundering claims

Yahoo – AFP, August 14, 2017

Ian Narev, the chief executive of Australia's biggest bank, the Commonwealth,
will retire, the company said on August 14, 2017, amid pressure from regulators
 over alleged breaches of money laundering and terrorism financing laws
(AFP Photo/SAEED KHAN)

Sydney (AFP) - The chief executive of Australia's biggest bank, the Commonwealth, will retire, the company said Monday, amid pressure from regulators over alleged breaches of laws on money laundering and terrorism financing.

The bank's chairwoman Catherine Livingstone said in a statement to the stock exchange that Ian Narev "will retire by the end of the 2018 financial year".

Narev faced calls to step down last week after the financial intelligence agency AUSTRAC launched a civil action against the bank alleging "serious and systemic non-compliance" with the laws more than 53,000 times.

The 50-year-old initially insisted he would stay on but Livingstone said Monday that the bank wanted to end speculation over his future.

"Succession planning is an ongoing process at all levels of the bank. In discussions with (Narev) we have also agreed it is important for the business that we deal with the speculation and questions about his tenure," she said.

"Today's statement provides that clarity and will ensure he can continue to focus, as CEO, on successfully managing the business."

Shares in CBA, Australia's biggest company by market capitalisation, rose by 1.40 percent to Aus$81.63 afternoon trade in Sydney.

"I'm not really that surprised that's happened," said TS Lim, a banking analyst at Bell Potter.

"The good thing is there's a lead time of a year or year-and-a-half, so there's continuity," he said. "I think it removes some of the volatility in the company."

New Zealand-born Narev took over the top job at the Commonwealth in late 2011.

He had previously been involved in its private banking arm and before that worked as a corporate lawyer.

His tenure has delivered bumper returns for shareholders, including a record Aus$9.93 billion (US$7.86 billion) annual net profit unveiled last week.

But it has also been marred by scandals over poor financial planning advice, insurance payouts and now allegations of money laundering.

In the latest case, the country's corporate regulator ASIC said Monday the bank was refunding some Aus$10 million in total to more than 65,000 customers after selling them "unsuitable consumer credit insurance".

The Commonwealth Bank is accused by AUSTRAC of failing to deliver on time 53,506 reports for cash transactions of Aus$10,000 or more at its cash deposit machines between November 2012 and September 2015, with a total value of Aus$624.7 million.

It also failed to report suspicious transactions on time, or at all, that totalled Aus$77 million, and did not monitor customers or manage the risk even after becoming aware of suspected money laundering, AUSTRAC claimed.

Each breach could attract Aus$18 million in fines, potentially running into the billions of dollars.

ASIC on Friday added it would also probe how the lender handled the alleged breaches.