Laundering Scandal Hits Bank CEO

14 August, 2017, 07:07 | Author: Valerie Burke
  • Chairman Chatherine Livingstone said in a press release on Monday Mr Narev's exit will depend on an'ongoing comprehensive internal and external search process

The head of Australia's Commonwealth Bank will step down by the middle of next year, the firm said.

It comes amid pressure from regulators over 53,700 alleged breaches of anti-money laundering laws.

Sydney-based Commonwealth Bank of Australia has been roiled by a major money-laundering scandal, which saw CEO Ian Narev's bonus cut to zero.

The series of scandals under Narev's leadership has raised questions about how CBA will find a replacement with no ties to controversy.

Bank Chair Catherine Livingstone said the board had chose to provide details of its CEO succession process to ensure markets are fully informed and to provide certainty for the business.

CBA last week announced an eighth straight record annual profit of $9.9 billion, but the news was overshadowed by the AUSTRAC allegations.

"Executive performance against financial and non-financial measures as strong for FY-17, however, remuneration outcomes demonstrate overriding consideration of the significant damage caused to the group's trust and reputation as a result of risk matters, most notably the recent civil penalty proceedings initiated by Austrac", the report said. Austrac's allegations largely relate to a failure to provide timely reports on transactions above a A$10,000 threshold over about three years from 2012, as well as accusations it failed to report suspicious transactions on time or at all and that even after it became aware of suspected money laundering of not monitoring customers.

Narev will be paid A$5.71 million for the year ending June 2017, down 35 percent from last year's A$8.77 million.

The company is now subject to investigations by the Australian Transaction Reports and Analysis Centre, as well as the Australian Securities and Investments Commission, which is seeking to determine whether the bank satisfied disclosure requirements.

Chairman Catherine Livingstone said in a statement the board was detailing its succession plan to "provide certainty for the business".

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