Australia’s largest bank has confirmed that it is on the lookout for a new boss, weeks after it was accused of breaching money laundering and terrorism financing laws more than 53,000 times.
The Commonwealth Bank of Australia said chief executive Ian Narev would retire by the end of next year, barely a week after chairman Catherine Livingstone said he retained the “full confidence” of the board despite civil action being taken against the bank.
His position has been questioned ever since Australian regulators claimed to have found thousands of “serious and systemic” breaches of anti-money laundering and counter-terrorism financing laws earlier this month.
Ms Livingstone said the exact timing of his move would be dependent on when they find someone, noting that they had begun a “comprehensive internal and external search process” for a replacement. Mr Narev has been in the top role since December 2011, having joined in 2007.
Short-term bonuses for Mr Narev and a number of other senior executives were slashed last week in light of “risk and reputation matters impacting the group” following the money laundering scandal, with its annual report showing that Mr Narev took home A$5.5m (£3.3m) for the year to June 30 – significantly less than the previous year.
Although profits at the bank inched up 5pc to A$9.88bn, the person appointed to take on the chief executive job will be tasked with building up trust in a bank facing a string of scandals.
Already battling to clean up its reputation after it was sued by the country’s financial crime agency, Australia’s securities regulator said on Monday that the bank had to refund millions of dollars to 65,000 customers sold unsuitable insurance between 2011 and 2015.
That came weeks after the Australian Transaction Reports and Analysis Centre (Austrac) alleged the bank failed to report suspicious transactions mostly going through its ‘intelligent’ deposit machines, a type of ATM that lets people anonymously deposit cash, even after being alerted by law enforcement agencies.
One example claimed that over $21m from drug imports was deposited into 11 CommBank accounts in 2015 and 2016, mostly through its intelligent deposit machines which were introduced some years earlier.
In a further bruising for the group this month, lawyers from Environmental Justice Australia filed legal proceedings against the bank for failing to adequately disclose climate change risk in its 2016 annual report, the first case involving shareholders testing how banks should disclose information about climate change risks.